|
65% or 51%?
Listed companies are insisting on the amendment of the provision of the law which stipulates that the number of shareholders present at first shareholders’ meetings must represent at least 65% of total shares.
The listed companies have asked the State Securities Commission to propose the National Assembly amend the Enterprise Law’s provision on the rate of shares represented at first shareholders’ meetings.
They say the rate of 51% is more reasonable, especially as Vietnam’s WTO commitments also say the necessary rate is 51%.
Nguyen Kim Long, a lawyer of the Saigon Securities Incorporated (SSI), said that SSI last year sent a dispatch to the National Assembly’s Law Committee and the Ministry of Planning and Investment, asking if the company could apply the regulation on the compulsory presence of shareholders representing 51% of total shares in the first shareholders’ meeting as per WTO commitments or not.
Long said that in principle, in the integration process, if the legal provisions of Vietnam are contrary to WTO commitments, Vietnam will apply the regulations under its WTO commitments. This means that businesses can apply the 51% ratio without having to wait for the law to be amended.
However, as the issue proves to be sensitive, no business dares apply the 51% rate unilaterally, while state management agencies have asked businesses not to apply this right at this moment.
As a result, listed companies still have to obey the Enterprise Law, which stipulates that the first shareholders’ meeting must have at least 65% of existing shares represented. SSI last year, for example, had to wait a long time before it was able to hit 65% and hold the meeting.
A lot of companies whose shares are spread among large numbers of shareholders like REE and SAM have been facing difficulties this year in organising shareholders’ meetings due to not enough shares being present.
“We tried to call for the participation of shareholders, but many of them did not come to the shareholders’ meeting,” said Mai Thanh, CEO of the Refrigeration Engineering Enterprise (REE).
According to Lawyer Tran Duy Canh, Director of Viet Law Firm, Resolution No 71/2006 of the National Assembly allows foreign-invested enterprises to organise first shareholders’ meetings with shareholders holding 51% of shares. Meanwhile, domestic businesses still have to follow the Enterprise Law.
“In the long term,” Canh said, “Vietnam has to amend the law to ensure fairness between domestic and foreign businesses.”
Meanwhile, Nguyen Dinh Phong, Investment Director of VNDirect Securities Company, said that instead of insisting on the law’s amendment, listed companies should pay more attention to taking care of relations with shareholders and prepare more effectively for shareholders’ meetings.
Analysts also say that organisation technique plays a very important role in the success of shareholders’ meetings. A company with VND15bil in chartered capital could not successfully organise its first shareholders’ meeting as it by chance decided to organise the meeting on the King Hung’s Death Anniversary, when many shareholders had gone away on holiday.
In many public companies in Vietnam, one state-owned shareholder or private investor holds from 51% to 65% of total shares. Therefore, some experts have pointed out that if the law allows the lower rate of 51%, the presence of one state shareholder would be enough to organise meetings.
Some lawyers have suggested that companies be given the right to determine the rate of shares accounted for at first shareholders’ meetings. Meanwhile, if state management agencies agree to lower the required rate, they should also think of measures to protect small shareholders.
VietNamNet, DTCK
|
