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SSC may delay capital increase deadline for three months
Enterprises may be given three more months to fulfill their capital increase plans, according to Head of the Market Development Department under the State Securities Commission (SSC) Nguyen Son, which has come as a delightful surprise to listed companies.
Under Decree No. 14 dated January 14, 2007, February 3 is the deadline for companies listing on the HCM City Stock Exchange (HOSE) to increase their chartered capital to at least VND80bil, or else move to the Hanoi bourse.
However, Son said that SSC would give more time to listed companies to increase capital, possibly three months.
“In fact, companies have had two years to prepare to meet the new requirements for listing on HOSE. However, the capital increase plans of many companies have failed due to the big difficulties in 2008,” Son said.
Statistics show that 46 enterprises on HOSE have less than VND80bil in chartered capital and six enterprises on the Hanoi Securities Trading Centre (HASTC) do not have VND10bil as required by the new regulation to be eligible for listing on the bourses.
Son said that after the ‘grace period’, or three months after February 3, 2009, enterprises which cannot raise their capital to the required levels will have to change bourses.
The companies which are now listing on HOSE will have to shift to list on HASTC, and those now listing on HASTC will have to go to UpCom (the market of unlisted public companies).
If the UpCom market is not operational by February 2009, SSC will still allow the companies which don’t have VND10bil in chartered capital to have share transactions on HASTC. However, investors will be informed that these are share items ineligible for listing.
In the long term, Son said the government would amend Decree 14 and set clear requirements on listing shares.
The requirements will be different for different markets. The companies to be listed on stock exchanges will have to have large capital scales, while the markets will have close links with regional markets.
Meanwhile, the requirements will be lower for the other market which will link to the market for the transactions of small- and medium-size enterprise shares.
Son said that all these things are being discussed for the plan on restructuring the stock market now being compiled by the State Securities Commission. The commission is planning to submit the project to the Ministry of Finance for the ministry’s submission to the government in 2009.
VNE
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