THE MINISTRY OF FINANCE
SOCIALIST REPUBLIC OF VIET NAM
Hanoi, June 18, 2004
GUIDING THE ISSUANCE OF STOCKS TO THE PUBLIC
In implementation of the Government’s Decree No. 144/ND-CP of November 28, 2003 on securities and securities market (called Decree No. 144 for short), the Finance Ministry hereby guides the issuance of stocks to the public as follows:
I. GENERAL PROVISIONS
1. This Circular prescribes the issuance of stocks to the public in the territory of the Socialist Republic of Vietnam, excluding the issuance of stocks by credit institutions, by State enterprises and foreign-invested enterprises when being transformed to operate in the form of joint-stock companies.
2. Issuance of stocks to the public under this Circular includes first-time issuance and additional issuance.
2.1. First-time issuance of stocks to the public includes:
2.1.1. First-time issuance of stocks to the public to mobilize capital for joint-stock companies (first-time primary offers);
2.1.2. First-time issuance of stocks to the public to change the owner’s capital structure (first-time secondary offers).
2.2. Additional issuance of stocks to the public includes:
2.2.1. Additional offers of stocks or share-purchasing rights by organizations which have issued stocks to the public in order to increase their charter capital;
2.2.2. Additional issuance of stocks by organizations which have issued stocks to the public for paying dividends or additional issuance of reward stocks in order to increase their charter capital from the owner’s capital source.
3. Stock certificates issued to the public under this Decree must fully contain the contents as prescribed by law. If stocks are issued in the form of book entry, stock purchasers shall be granted ownership certificates.
II. SPECIFIC PROVISIONS
1. Conditions for first-time issuance of stocks to the public
1.1. The contributed charter capital at the time of registration of stock issuance must be at least VND 5 billion, calculated according to the book value.
1.2. Profitable production and business activities mean that stock issuance-registering organizations must have after-tax profits in the year preceding the year of issuance registration and at the same time must not have losses cumulated up to the year of issuance registration.
1.3. Feasible plans on the use of capital to be acquired from stock issuance are adopted by the shareholders’ general assembly.
1.4. Stocks are issued through intermediary organizations.
1.5. The issuance of stocks to the public in order to acquire capital for setting up new joint-stock companies to operate in the infrastructure construction and hi-tech domains shall not be required to comply with the provisions of Point 1.1 and 1.2 above.
2. Issuance registration dossiers
2.1. A dossier of registration of first-time issuance of stocks to the public consists of:
2.1.1. An issuance registration application, made according to a set form;
2.1.2. A valid copy of the business registration certificate, including business change registration certificates;
2.1.3. The company charter, which complies with law provisions, contains no restriction on the transfer of ordinary stocks by ordinary shareholders, excluding stocks of members of the Managing Board, the Directorate or the Control Board;
2.1.4. The shareholders’ general assembly’s decision approving the issuance of stocks to the public; decision approving the feasible plan on the use of capital to be acquired from the issuance drive, for cases of first-time primary offer to the public;
2.1.5. The prospectus, which is made according to a set form and must satisfy the following requirements:
– Containing all necessary, truthful and clear information, aiming to help investors and securities companies to correctly assess the financial situation, the business situation and prospect of the issuance-registering organization;
– Containing financial data compatible with the data of the audited financial statement in the issuance registration dossier;
– Containing the signatures of the chairman of the Managing Board, the head of the Control Board, the director (general director), the chief accountant of the issuance-registering organization and the representative at law of the principal issuance-underwriting organization (if any). For representatives’ signatures, authorization papers are required;
2.1.6. The list and resumes of members of the Managing Board, the Directorate and the Control Board, made according to a set form.
2.1.7. The financial statements of two consecutive years preceding the year of issuance registration, which must satisfy the following requirements:
– Complying with the State’s current accounting regime;
– Annual financial statements must be certified by independent audit organizations. The auditors’ opinions on the financial statements must express their full approval or approval with reservations. Where the auditors’ opinions express approval with reservations, such reservations must not greatly affect the financial status of the issuance-registering organization;
– Where the period from the last day of the year of the latest financial statements to the time the issuance registration dossiers are sent to the State Securities Commission exceeds 90 days, the issuance-registering organization must make additional financial statements up to the latest month or quarter;
– Where unusual changes arise after the end of the year of the latest financial statements; the issuance-registering organizations should make additional financial statements up to the latest month or quarter;
– The copies of the financial statements must be valid as prescribed by law.
For newly established joint-stock companies prescribed in Clause 4, Article 6 of Decree No. 144, their financial statements may be substituted with their production and business plans already approved by competent authorities (if any) or their Managing Boards’ or founding shareholders’ commitments to take joint liability.
2.1.8. The issuance-underwriting commitment (if any), made according to a set form. Where a group undertakes the issuance-underwriting, the principal issuance-underwriting organization’s commitment must be enclosed with the contracts signed among the issuance-underwriting organizations. The docu-ments related to the issuance-underwriting commit-ment may be sent later than other documents but not later than the date the State Securities Commis-sion grants the issuance registration certificate.
2.2. Dossier of registration of additional issuance of stocks to the public
2.2.1. Where an organization which has issued stocks to the public registers the additional issuance of stocks or stocks together with the share-purchasing right in order to increase its charter capital, its dossier of registration of additional issuance consists of:
a/ An application for additional issuance;
b/ The shareholders’ general assembly’s decision on additional issuance of stocks and approval of the plans on distribution and use of the to be-acquired money amount;
c/ Supplementary document of the prospectus.
2.2.2. Where an issuance-registering organization distributes stocks for paying dividends or distributes reward stocks to increase its charter capital from the owner’s capital source, its issuance registration dossier consists of the documents prescribed at Points a and b, Clause 2.2.1 above and documents proving the lawful capital source used for additional issuance of such stocks according to law provisions.
2.2.3. A dossier of registration of additional issuance to be used for many issuance drives must be supplemented with documents on the company’s situation and the project implementation situation prior to each issuance drive, if the interval between two issuance drives is six months or longer.
3.1. Issuance-underwriting organizations must meet the conditions specified in Article 11 of Decree No. 144, specifically:
3.1.1. Having issuance-underwriting licenses granted by the State Securities Commission;
3.1.2. Only being allowed to underwrite the issuance of stocks with the total value not exceeding 30 of their own capital. Own capital stated at this Point is own capital reflected in the latest audited financial statement before the time of submission of the dossier and the value of stocks permitted for issuance-underwriting, which is calculated according to the issuance price.
3.2. Where the issuance-underwriting is undertaken by two or more underwriting organiza-tions, an issuance-underwriting group must be formed and operate under a contract signed by all underwriting organizations. The principal issuance-underwriting organization shall sign on behalf of the group an issuance-underwriting contract with the issuing organization. The issuance-underwriting organizations may bear joint or independent responsibilities for the distribution of stocks.
3.3. Documents proving the underwriting organizations’ full satisfaction of the above-prescribed underwriting conditions shall be sent together with the issuance-underwriting commitments to the State Securities Commission.
4. Issuance registration
4.1. Each dossier of registration of issuance of stocks to the public shall be made in 2 sets (1 original and 1 true copy) and addressed to the State Securities Commission.
4.2. Dossiers may be amended and supplemented when it is deemed so necessary by the issuance-registering organizations or requested by the State Securities Commission. The amended and supplemented documents must contain the signatures of the persons who signed the issuance registration dossiers addressed to the State Securities Commission or of the persons holding the same titles of the above-said persons.
4.3. Issuance-registering organizations must not issue stocks to the public when they have not yet received the issuance registration certificates of the State Securities Commission and not yet disclosed their prospectuses.
4.4. Where after the issuance registration certificates have been granted the State Securities Commission or the issuing organizations find it necessary to have the issuance registration dossiers supplemented or amended, the issuing organizations must submit supplementary documents to their prospectuses, make timely announcements thereon through the information means on which the issuance has been disclosed and at the same time supply such documents to investors when so requested.
4.5. Within 30 working days after receiving the complete and valid dossiers, the State Securities Commission shall grant certificates of registration of issuance of stocks to the public. In case of refusal to grant such certificates, it shall reply in writing, clearly stating the reasons therefor.
5. Information prior to issuance and issuance announcement
5.1. Pending the consideration of their issuance registration dossiers by the State Securities Commission, the issuance-registering organizations, the issuance-underwriting organizations and concerned subjects must not advertise for, offer or distribute stocks to the public in any form. Market survey documents must not contain information distorted from the main contents of the prospectuses already sent to the State Securities Commission.
5.2. The issuance must be announced within the prescribed time limit with the contents prescribed in the issuance notice form.
5.3. Documents in service of issuance include: The issuance notice, the prospectus or summarized prospectus, and its supplementary document (if any), already approved by the State Securities Commission. Issuing organizations and concerned organizations and individuals must not distribute documents containing distorted, misleading information to investors. Summarized prospectuses must reflect truthfully the contents of the complete ones and contain major titles like in the complete ones already approved by the State Securities Commission.
6. Stock distribution
6.1. Issuing organizations or distributing organizations must distribute stocks at the sale prices set in the complete prospectuses already registered with the State Securities Commission or the sale prices formed through auction.
6.2. When distributing stocks to the public, issuing organizations must create favorable conditions for individual investors to purchase stocks. Stock purchase registration cards must clearly indicate the prospectus-supplying places.
6.3. Money sums paid for stocks must be transferred into blocked bank accounts till the issuance drive completes.
6.4. Where stock purchasers suffer from damage due to distorted or untruthful information in the prospectuses and other distributed documents, issuing organizations, chairmen and members of the Managing Boards, heads of the Control Boards, directors (general directors), chief accountants and participants in the compilation of the issuance registration dossiers, consultancy organizations, issuance-underwriting organiza-tions, independent audit organizations and persons who signed the audit reports confirming the issuing organizations’ financial statements shall be handled under the regulations on administrative sanctions in the securities and securities market domain.
6.5. Issuing organizations and issuance-underwriting organizations must deliver stocks or stock ownership certificates to the purchasers within 30 days after the date of completion of the issuance drive.
6.6. Issuing organizations or distributing organiza-tions must complete the stock distribution drive within 90 days after the issuance registration certificates become valid. Past this time limit, if they have any stocks left unsold and wish to continue distributing them, they must send written requests to the State Securities Commission for extension of their issuance registration certificates, clearly stating the reasons and plans for distribution of the remaining quantities of stocks.
6.7. The provisions of Point 6.1 thru Point 6.6 above shall not apply to the case of distribution of stocks to pay dividends or distribution of bonus stocks to increase the charter capital from the owner’s capital source.
7. Withdrawal of issuance registration certificates
7.1. Within 5 working days after the State Securities Commission decides to withdraw the issuance registration certificates, issuing organizations must announce such withdrawal through the information means on which the issuance has been publicized, with the following contents:
– The serial number and date of the decision to withdraw the issuance registration certificate;
– The reason for the withdrawal of the issuance registration certificate;
– The time of refunding the money amounts paid to, or deposited for purchase of, stocks to the investors;
– The place of refunding the money amounts paid to, or deposited for purchase of, stocks to the investors;
– The payment mode.
7.2. Apart from the withdrawal cases specified in Article 17 of Decree No. 144, the issuance registration certificates shall also be withdrawn when the issuing organizations fail to complete the stock distribution within the time limit specified at Point 6.6, Section II of this Circular.
8. Reporting and information disclosure regime
8.1. Reports on the results of issuance drives shall be made according to a set form and enclosed with the written certifications of the banks where the block accounts of the money amounts acquired in the issuance drives are opened.
8.2. The reporting and information disclosure by issuing organizations shall comply with the provisions of Chapter VI of Decree No. 144 and the Finance Ministry’s Circular guiding the information disclosure regime.
III. ORGANIZATION OF IMPLEMENTATION
1. This Circular takes effect 15 days after its publication in the Official Gazette.
The ministers, the heads of the ministerial-level agencies or of the Government-attached agencies, the presidents of the provincial/municipal People’s Committees, the chairmen of the Managing Boards, the directors (general directors) of issuing organi-zations and securities companies and the heads of the concerned units shall have to implement this Circular.
7. Any problems arising in the course of imple-mentation should be reported by the concerned organizations and individuals to the Finance Ministry for study, guidance and settlement.
FOR THE FINANCE MINISTER