Vietnam: Representatives holding managerial positions in enterprises of which over 50% of charter capital is held by the State must not be officials or public employees

Currently, “representative” means a person who is appointed by a state capital owner to represent partial or entire state capital invested in an economic group, corporation or company and perform all or some rights, responsibilities and obligations of the state shareholder or capital-contributing member in that economic group, corporation or company in accordance with regulations of law.

According to Decree No. 106/2015/NĐ-CP of Vietnam’s Government, representatives holding managerial positions in enterprises of which over 50% of charter capital is held by the State must not be officials or public employees. However, if an official or public employee is appointed to act as a representative, the official must obtain a work transfer decision or the public employee must terminate his/her public employee contract.

Moreover, this Decree also stipulates dual office-holding of representatives as follows:

- A representative shall not concurrently act as the representative in another economic group, corporation or company the state capital invested in which is owned by a supervisory ministry or provincial People's Committee.

- Representatives are not allowed to assign or re-authorize others to vote or decide contents assigned by state capital owners on their behalf.

- A Chairperson of a Board of Directors is not allowed to concurrently act as a General Director.

- A Chairperson of a Board of Members is not allowed to concurrently act as a General Director.

View relevant provisions at Decree No. 106/2015/NĐ-CP of Vietnam’s Government, effective from December 10, 2015.

Thu Ba

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