Decision No. 01/1998/QD-BTC On the issuance of regulations on the management and use of proceeds from the sale of state shares and dividends from state shares

Pursuant to …;

Regarding the issuance of the Regulation on the management and use of proceeds from the sale of state-owned shares and dividends from such shares

 of the State

 THE MINISTER OF FINANCE

Pursuant to Decree No. 15/CP dated March 2, 1993 of the Government stipulating the tasks, powers, and responsibilities for state management of ministries and ministerial-level agencies;

Pursuant to Decree No. 178/CP dated October 28, 1994 of the Government stipulating the functions, tasks, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 28/CP dated May 7, 1996 of the Government regarding the conversion of some state-owned enterprises into joint-stock companies;

At the proposal of the General Director of the State Capital and Asset Management Bureau at Enterprises;

DECISION:

Article 1. This Decision promulgates temporarily the Regulation on the management and use of proceeds from the sale of state-owned shares and dividends from such shares.

Article 2. This Decision takes effect fifteen days from the date of signature. Ministries, ministerial-level agencies, government-affiliated agencies, provincial People's Committees under central cities have the responsibility to coordinate with the Ministry of Finance in implementing this Decision.

Article 3. The State Capital and Asset Management Bureau at Enterprises has the responsibility to disseminate and guide enterprises in implementing the Regulation on the management and use of proceeds from the sale of state-owned shares and dividends from such shares issued together with this Decision.

REGULATIONS

MANAGEMENT AND USE OF PROCEEDS FROM THE SALE OF STATE-OWNED SHARES AND DIVIDENDS FROM SUCH SHARES
(Issued together with Decision No. 01/1998/QD/BTC of the Minister of Finance)

A. GENERAL PROVISIONS

Article 1. This Regulation guides the management and use of proceeds from the sale of state-owned shares when implementing the privatization of state-owned enterprises and the management and use of dividends from state-owned shares in joint-stock companies where the State participates in capital contribution.

Article 2. In this Regulation, the following terms are understood as follows:

1. Proceeds from the sale of state-owned shares: is the amount of money received from selling part or all of the value of state-owned enterprises when implementing privatization or selling state-owned shares in joint-stock companies.

2. State-owned shares: are shares retained by the State in independent state-owned enterprises that have been privatized; shares contributed by the State in founding joint-stock companies; shares purchased from joint-stock companies.

3. Shares of state-owned enterprises: are shares retained by state-owned enterprises in joint-stock companies when privatizing a portion of the enterprise; shares contributed by state-owned enterprises in founding joint-stock companies; shares purchased by state-owned enterprises from joint-stock companies.

4. Dividends from state-owned shares: is the amount of dividends distributed by joint-stock companies corresponding to the number of state-owned shares in the company.

5. Dividends from state-owned enterprises' shares: is the amount of dividends distributed by joint-stock companies corresponding to the number of state-owned enterprises' shares in the company.

Article 3. Proceeds from the sale of state-owned shares and dividends from state-owned shares, referred to as privatization revenue, must be deposited into the Treasury of the locality where the enterprise is headquartered and centralized into the account "privatization revenue" at the Central Treasury managed by the Minister of Finance for use in the purposes of: addressing employment, implementing social policies for surplus labor, and contributing to supplementing capital for prioritized state-owned enterprises needing consolidation and development, not to be used for regular expenditures of the State budget. Each ministry managing an economic-industrial sector (hereinafter referred to as the ministry managing the sector), provincial People's Committee under central cities (hereinafter referred to as the provincial People's Committee), and State-owned corporations established by the Prime Minister's Decision No. 91/TTg dated March 7, 1994 (hereinafter referred to as Corporation 91) will have a separate account to collect privatization revenue from subordinate enterprises for the Minister of Finance to base decisions on using privatization revenue for each ministry, locality.

Article 4. Ministries managing sectors, provincial People's Committees, and Corporation 91 have the responsibility to monitor privatization revenue from enterprises managed by ministries, provincial People's Committees, and Corporation 91 to serve as the basis for planning the effective use of privatization revenue.

Article 5. Enterprises have the responsibility to use privatization revenue for approved purposes, settle accounts according to current regulations, submit to the Ministry of Finance, and be subject to inspection and supervision by the State Capital and Asset Management Bureau at Enterprises.

B. SPECIFIC PROVISIONS

Article 6.

1. Privatization revenue includes:

- Proceeds from the sale of state-owned shares when implementing privatization must be fully deposited into the Treasury of the locality where the enterprise is headquartered in accordance with Clause c Point 1 Section II Part Two Circular No. 50TC/TCDN dated August 30, 1996 of the Ministry of Finance guiding the implementation of Decree No. 28/CP dated May 7, 1996 of the Government on financial issues, sale of shares, and issuance of stocks in the process of converting some state-owned enterprises into joint-stock companies. When shareholders pay for shares of the State on credit, the joint-stock company is responsible for immediately depositing the amount into the Treasury along with a payment request form, and the joint-stock company may not use this amount for any other purpose.

- Dividends from state-owned shares: the joint-stock company is responsible for deducting and depositing into the Treasury of the locality where the company is headquartered simultaneously with the distribution of dividends to other shareholders of the company, while also informing the agency owning the state capital for monitoring.

2. The State Capital and Asset Management Bureau at Enterprises is responsible for monitoring and urging the collection of delayed payments for the sale of state-owned shares and dividends from state-owned shares, and reporting to the Minister of Finance to handle cases violating this regulation.

Article 7. Privatization revenue is centrally managed for use in the following purposes:

1. Providing severance pay to workers who voluntarily terminate their contracts when enterprises implement privatization.

2. Re-training for young workers with long-term development potential when transitioning to joint-stock companies but not being utilized in their trained professions.

3. Investing in technological upgrades, enhancing production capacity, and strengthening financial capabilities for prioritized state-owned enterprises needing consolidation and development.

4. Contributing capital to establish new joint-stock companies, purchasing shares of privatized companies or other joint-stock companies.

Article 8. Procedures and authority for granting severance pay to workers who voluntarily stop working when enterprises implement privatization:

1. Workers in enterprises undergoing corporatization who request to terminate their employment shall be entitled to use proceeds from corporatization to settle severance pay according to the Labour Law and Decree No. 197/CP dated December 31, 1994 of the Government detailing and guiding the implementation of certain Articles of the Labour Code on wages.

2. A list of those requesting termination of employment and the amount of severance pay for each person shall be compiled together with the corporatization project of state-owned enterprises.

3. For workers who have not yet reached retirement age within five years and wish to take unpaid leave, the State will use the proceeds from corporatization to provide social insurance for these workers; the level of provision is 20% based on the salary at the time the worker takes unpaid leave. When they meet the criteria for retirement, the workers must go to the social insurance agency to complete retirement procedures.

4. A list of those requesting unpaid leave and the amount requested to be used from the proceeds of selling shares to provide social insurance shall be compiled simultaneously with the corporatization project of state-owned enterprises.

5. After the enterprise has commenced operations under the Company Law following corporatization, the Chairman of the Board of Directors of the joint-stock company shall check and submit the formal list of those requesting severance pay or social insurance to the Ministry of Finance to request funds from the corporatization proceeds to be disbursed to the workers.

6. Based on the list submitted by the Chairman of the Board of Directors, after reviewing and comparing with current regulations, the Ministry of Finance shall issue a decision and transfer funds from the account "Proceeds from Corporatization" at the Treasury to the joint-stock company for disbursement of severance pay or social insurance payments to the workers.

7. The Chairman of the Board of Directors and General Director of the joint-stock company are responsible for managing this fund and disbursing it accurately to the approved recipients and settling accounts according to current regulations and reporting to the Ministry of Finance.

Article 9. Procedures and authority for using proceeds from corporatization to train and improve skills for young workers with long-term development potential:

1. Enterprises undergoing corporatization shall base on labor demand and individual wishes to compile a list of young workers (under 40 years old for men, under 35 years old for women) who need retraining to improve their skills so that they can return to work at the joint-stock company. The list shall be compiled after the enterprise has completed its corporatization plan and determined the industries requiring skill improvement, the name of the school, and the training period for the workers.

2. After the joint-stock company has commenced operations, the Chairman of the Board of Directors shall review the initial list and, based on the proceeds from corporatization deposited into the Treasury, submit the list to the People's Committee of the province (for enterprises decided by the provincial People's Committee to convert state-owned enterprises into joint-stock companies) or the Ministry in charge of the industry (for enterprises decided by the Ministry to convert state-owned enterprises into joint-stock companies), or the Chairman of the Board of Directors of Total Corporation 91 (for enterprises that are members of Total Corporation 91) for consideration and comments.

The Minister in charge of the industry, the Chairman of the Provincial People's Committee, and the Chairman of the Board of Directors of Total Corporation 91 shall base on the proceeds from corporatization of the province, ministry, or Total Corporation 91 to propose opinions and submit them to the Minister of Finance for examination and decision.

3. Based on the proceeds from corporatization of the ministry, province, or Total Corporation 91, and the opinions of the Ministers, the Chairman of the Provincial People's Committee, and the Chairman of the Board of Directors of Total Corporation 91, the Minister of Finance shall decide on the use of proceeds from the sale of shares for skill improvement training.

4. Based on the actual number of people entering schools for skill improvement, the Ministry of Finance shall transfer funds from the account of proceeds from corporatization to the accounts of the schools according to the annual budget allocation for training applicable to centrally and locally managed schools.

Article 10. Procedures and authority for using proceeds from corporatization to supplement capital for state-owned enterprises:

1. State-owned enterprises in need of priority consolidation and development may use proceeds from corporatization to supplement capital.

2. State-owned enterprises wishing to use proceeds from corporatization must report their financial situation clearly and submit plans for using proceeds from corporatization to upgrade technology, expand production... to the Ministry in charge of the industry (for enterprises established by the Ministry) or the Chairman of the Board of Directors of Total Corporation 91 (for members of Total Corporation 91) for reporting.

3. Based on the proceeds from corporatization within the scope of management by the Ministry in charge of the industry, the Provincial People's Committee, or Total Corporation 91, the Minister, the Chairman of the Provincial People's Committee, or the Chairman of the Board of Directors of Total Corporation 91 shall examine and propose opinions to the Minister of Finance for decision.

4. Based on the effectiveness of the plan, the proceeds from corporatization within the scope of management by the Ministry in charge of the industry, the Provincial People's Committee, or Total Corporation 91, and the opinions of the competent authority as stipulated in Clause 3 of this Article, the Minister of Finance shall decide to allow state-owned enterprises to use proceeds from corporatization of the State and carry out procedures to transfer funds from the Treasury account to the enterprise account according to the progress of the plan.

5. State-owned enterprises must use the proceeds from corporatization for the intended purpose as approved in the plan and must report the settlement of the use of this amount to the Ministry of Finance according to current regulations.

Article 11. Procedures and authority for deciding on capital contribution to establish joint-stock companies:

1. Based on the development potential of each industry, the ability to attract labor, and the proceeds from corporatization managed by the Ministry in charge of the industry, the Provincial People's Committee, or Total Corporation 91, the Minister, the Chairman of the Provincial People's Committee, or the Chairman of the Board of Directors of Total Corporation 91 shall assign a unit to act as a founding member to develop a plan to establish a joint-stock company according to current regulations.

2. After the plan for establishing a joint-stock company has been approved, relevant ministries managing industries, provincial People's Committees, and the Board of Directors of State-owned Enterprise Group 91 shall submit a request to the Minister of Finance to issue a decision on using proceeds from shareholding reform to contribute capital for the establishment of a joint-stock company, along with the plan for establishing the joint-stock company and a confirmation letter from the Treasury regarding the proceeds from shareholding reform still held at the Treasury. 3. After reviewing the effectiveness of the plan, the ability to absorb surplus labor due to shareholding reform, and the proceeds from shareholding reform at the Treasury, the Minister of Finance will issue an order to transfer funds from the account for shareholding reform proceeds at the Treasury to a frozen account (as stipulated in Clause 5, Article 32 of the Company Law) opened by the founding unit.

4. In the event that the joint-stock company is not established, the founding unit shall be responsible for transferring the amount transferred by the Ministry of Finance into the frozen account back to the account for shareholding reform proceeds at the provincial or municipal Treasury and report to the Ministry of Finance for monitoring.

C. IMPLEMENTATION

Article 12. The State Treasury is responsible for opening accounts for the Minister of Finance and sub-accounts for each ministry, locality, and State-owned Enterprise Group 91 to monitor the proceeds from shareholding reform of each ministry managing industries, provincial People's Committee, and State-owned Enterprise Group 91. Monthly reports shall be submitted to the Department of Budget Management, General Department of State Capital and Asset Management in Enterprises on the proceeds from shareholding reform of each ministry, locality, and State-owned Enterprise Group 91.

It is strictly prohibited for the State Treasury to transfer funds from the account for shareholding reform proceeds without an order from the Minister of Finance.

Article 13. The General Department of State Capital and Asset Management in Enterprises shall be responsible for:

1. Assisting the Minister of Finance in uniformly managing state affairs concerning the proceeds from and the use of shareholding reform proceeds of the state.

2. Monitoring and inspecting plans for the use of shareholding reform proceeds by enterprises, proposing opinions to the Minister of Finance on plans for the use of shareholding reform proceeds and measures to handle violations by enterprises when submitting and using shareholding reform proceeds.

3. Based on the Decision of the Minister of Finance, the General Department of State Capital and Asset Management in Enterprises shall issue payment orders to withdraw from the "shareholding reform proceeds" account and transfer to the beneficiary units of shareholding reform proceeds.

4. Quarterly and annually, it shall report to the Minister of Finance on the situation of the use of shareholding reform proceeds, and simultaneously notify the Department of National Budget Management to process revenue and expenditure entries into the national budget.

Article 14. This regulation shall take effect fifteen days after the date of signature and shall be uniformly applied throughout the country, replacing the regulation attached to Decision No. 1256TC/TCDN/QD dated December 13, 1995 of the Ministry of Finance.

Ministries, agencies equivalent to ministries, government agencies, provinces, and centrally governed cities shall be responsible for guiding the implementation of this regulation.

During the implementation of this regulation, if there are difficulties or obstacles, ministries, sectors, provinces, cities, and enterprises need to promptly reflect them to the Ministry of Finance for research and resolution.