Cases of transfer of rights to represent state capital owner in wholly state-owned enterprises in Vietnam

Cases of transfer of rights to represent state capital owner in wholly state-owned enterprises in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Cases of transfer of rights to represent state capital owner in wholly state-owned enterprises in Vietnam

Cases of transfer of rights to represent state capital owner in wholly state-owned enterprises according to Article 48 of Decree 23/2022/ND-CP are as follows:

- Methods of transfer of rights to represent state capital owner in enterprises prescribed in this Decree shall only apply to transfer without payment. Transfer with payment shall comply with regulations of law on sale of entire enterprises and transfer of capital and assets in enterprises.

- Methods of transfer of rights to represent state capital owner in enterprises:

+ Transfer between owner’s representative agencies means the transfer of rights to represent the owner in wholly state-owned enterprises between Ministries, ministerial agencies, Governmental agencies and Provincial People's Committees;

+ Transfer of partial capital and assets between wholly state-owned enterprises means the transfer of rights to represent the owner of partial capital and assets between wholly state-owned enterprises.

This method shall only apply to capital or assets between enterprises directly engaging in national defense and security to serve the performance of national defense and security tasks and other cases decided by the Prime Minister;

+ Transfer of public investment projects or works from such project or work managing agencies or organizations to wholly state-owned enterprises shall comply with regulations of law on transfer of state assets;

+ Transfer of state capital in enterprises between owner’s representative agencies and organizations or enterprises specializing in investment and trading of state capital shall comply with specific regulations of the Government or the Prime Minister.

2. Conditions for transfer between owner’s representative agencies in wholly state-owned enterprises in Vietnam

According to Article 49 of Decree 23/2022/ND-CP, when carrying out transfer of rights to represent the state capital owner in a wholly state-owned enterprise between owner’s representative agencies, the following conditions must be satisfied:

- The business lines of the enterprise in which the rights to represent state capital owner are transferred are suitable for the business lines or objectives of the owner’s representative agency receiving the transfer.

- The enterprise is not subjected to dissolution or becomes insolvent.

- The transfer of rights to represent state capital owner in enterprise is included in the document on reorganization or innovation of enterprise approved by the Prime Minister. If an enterprise is not governed by this document, owner’s representative agencies relevant to the transfer shall reach an agreement and submit it to the Prime Minister for consideration.

3.Rules for organizing transfer of rights to represent state capital owner in enterprises in Vietnam

Rules for organizing transfer of rights to represent state capital owner in enterprises in Vietnam according to Article 50 of Decree 23/2022/ND-CP as follows:

- The transfer of rights to represent state capital owner in enterprises must adhere to the principle of preserving the status quo.

- In case of changes in data after the transfer, relevant parties shall jointly find out reasons and take measures for settling and correcting data to be officially transferred.

- Data transferred is those on the latest annual or quarterly financial statements which have been prepared and audited in accordance with regulations.

If the audited annual or quarterly financial statements are unavailable, data transferred shall be those on the enterprise’s latest financial statements.

The owner’s representative agency or enterprise that receives transfer shall hire an independent audit organization to conduct audit of the received financial statements and correct transferred data (if any) according to Clause 2 of Article 50 of Decree 23/2022/ND-CP.

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