Vietnam: 06 principles of amalgamation and merger of investment companies

Specifically, according to Article 17 of Circular No. 227/2012/TT-BTC of the Ministry of Finance of Vietnam, principles of amalgamation and merger of investment companies include:

1. The plan for consolidation or merger and contract of consolidation or merger must be approved by the General Meeting of Shareholders of the related companies. The plan for consolidation or merger must state the reason therefor, the form of implementation, the expected impact to the shareholders, the method of determining net asset value, conversion rate, the rate of payment in cash (if any), the principle of property transfer between the public securities investment company;

2. The expense of legal consultancy services, administrative expenses and other services expenses related to the consolidation, merger shall not be recorded in operating expenses of the public Securities Investment Company or other expenses that the shareholders are incurred unless otherwise decided by the General Meeting of Shareholders;

3. In case of the stock swap combined with the payment in cash, the shareholders of companies being consolidated or merged shall receive an additional amount not exceeding 10% of net asset value calculated on one (01) stock at the date of consolidation or merger;

4. Where the shareholders of the public Securities Investment Company oppose the consolidation or merger, these shareholders may request the public Securities Investment Company being consolidated or merged to redeem their shares;

5. The information about the amalgamation and merger is promptly, adequately, and accurately provided for shareholders by the asset management company and the Board of Directors of the investment company;

6. The interests and obligations are settled according to the agreements among the parties in a voluntary and lawful manner.

The shareholders that protest against the amalgamation or merger are entitled to request the investment company to repurchase their shares. The repurchase price shall be agreed by both parties based on the net asset value per share at the repurchase time. The creditors are entitled to request the investment company to repay the loans before the amalgamation or merger.

Note: Within 60 days from the date on which the General assembly of shareholders of last the investment company in the amalgamation or merger passes the decision on the amalgamation or merger, the investment company shall send the State Securities Commission a written request for the issue or the adjustment of the License for establishment and operation of the transferee company.

View more details at Circular No. 227/2012/TT-BTC of the Ministry of Finance of Vietnam, effective from July 01, 2013.

Le Vy

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