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Securities investors seriously lacking information
A lot of cases related to declarations of incorrect information about listed companies’ financial situations have disappointed investors, prompting them to leave the market and make the market even gloomier.
In an effort to help improve the lack of transparency of the stock market and protect investors, the State Securities Commission (SSC) yesterday, March 31, held a meeting, gathering members of the stock market to discuss a way out of the existing problems.
Vu Thi Kim Lien, Deputy Chairwoman of SSC, said that the lack of information and the release of wrong information prove to be the hottest problems now in the market. There are big gaps between listed companies’ business results in different quarters, while there are differences in businesses’ finance reports and businesses’ audited finance reports.
However, Lien admitted that it will require great exertion to obtain a standard system of rules and policies on information exposure. Businesses may complain that this will make businesses’ production costs higher, while auditing firms may complain that they do not have enough staff for this.
A representative of Construction Company No 2, who attended yesterday’s meeting, said that the requirement on a quarterly finance report check proves to be unfeasible as the company would have to spend time working with auditors. He said that the requirement should be applied to companies which are found violating regulations on information exposure only.
Members of the stock market all can see ‘holes’ in the currently-applied mechanism on supervising information exposure. Quarterly, half-year and yearly finance reports of many listed companies have low quality, and many do not provide true information.
A lot of regulations which prove to be necessary to ensure the normal operation of the stock market have not been promulgated, including regulations on requiring listed companies to report treasury stock transactions, the use of mobilised capital after issuances, though the stock market has been operating for many years.
According to Nguyen Son, Head of the Market Development Division under SSC, the watchdog agency has been aware of the problems, and it is compiling a new document which is expected to replace Circular No 38 on information exposure in the stock market. The new document is believed will fix the current problems and be promulgated soon, possibly in April 2009.
Son said that strict requirements will be set up. For example, finance reports of public companies must be audited by independent auditing firms, while annual finance reports of listed companies must be audited by authorised auditing firms.
Meanwhile, representatives of many enterprises have suggested that SSC build up a mechanism which forces listed companies to provide extraordinary information which may affect the benefits of shareholders, like businesses’ decisions to borrow money or issue shares worth 30% of businesses’ real capital and more.
VietNamNet, DTCK, SGTT
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