Circular No. 04/2024/TT-BQP amends and supplements some articles of Circular No. 155/2019/TT-BQP dated October 15, 2019, issued by the Minister of National Defense on guiding the conversion of state-owned enterprises and wholly owned limited liability companies invested with 100% charter capital by state-owned enterprises under the Ministry of National Defense into joint-stock companies, and Circular No. 156/2019/TT-BQP dated October 15, 2019, issued by the Minister of National Defense on guiding the transfer of state-owned shares at joint-stock companies under the Ministry of National Defense as the principal owner.

CIRCULAR

AMENDING AND SUPPLEMENTING CERTAIN ARTICLES OF CIRCULAR NO. 155/2019/TT-BQP DATED OCTOBER 15, 2019 OF THE MINISTER OF NATIONAL DEFENSE ON GUIDELINES FOR CONVERTING STATE ENTERPRISES AND SINGLE-MEMBER JOINT STOCK COMPANIES WITH 100% CAPITAL CONTRIBUTED BY STATE ENTERPRISES UNDER THE MINISTRY OF NATIONAL DEFENSE INTO JOINT STOCK COMPANIES AND CIRCULAR NO. 156/2019/TT-BQP DATED OCTOBER 15, 2019 OF THE MINISTER OF NATIONAL DEFENSE ON GUIDELINES FOR IMPLEMENTING TRANSFER OF STATE CAPITAL INVESTMENTS IN JOINT STOCK COMPANIES WHERE THE MINISTRY OF NATIONAL DEFENSE IS THE REPRESENTATIVE OWNER

Pursuant to the Enterprise Law dated July 1, 2020;

Pursuant to Decree No. 10/2019/NĐ-CP dated January 30, 2019 of the Government on the exercise of rights and responsibilities of state-owned enterprise representatives;

Pursuant to Decree No. 140/2020/NĐ-CP dated November 30, 2020 of the Government amending and supplementing certain articles of Decree No. 126/2017/NĐ-CP dated November 16, 2017 of the Government on converting state enterprises and single-member joint stock companies with 100% capital contributed by state enterprises into joint stock companies; Decree No. 91/2015/NĐ-CP dated October 13, 2015 of the Government on state capital investment in enterprises and management and use of capital and assets in enterprises; and Decree No. 32/2018/NĐ-CP dated March 8, 2018 of the Government amending and supplementing certain articles of Decree No. 91/2015/NĐ-CP;

Pursuant to Decree No. 01/2022/NĐ-CP dated November 30, 2022 of the Government stipulating functions, tasks, powers, and organizational structure of the Ministry of National Defense;

At the proposal of the Director of the Economic Department of the Ministry of National Defense;

The Minister of National Defense issues this Circular amending and supplementing certain articles of Circular No. 155/2019/TT-BQP dated October 15, 2019 of the Minister of National Defense on guidelines for converting state enterprises and single-member joint stock companies with 100% capital contributed by state enterprises under the Ministry of National Defense into joint stock companies and Circular No. 156/2019/TT-BQP dated October 15, 2019 of the Minister of National Defense on guidelines for implementing transfer of state capital investments in joint stock companies where the Ministry of National Defense is the representative owner.

Article 1. Amending and supplementing certain articles of Circular No. 155/2019/TT-BQP dated October 15, 2019 of the Minister of National Defense on guidelines for converting state enterprises and single-member joint stock companies with 100% capital contributed by state enterprises under the Ministry of National Defense into joint stock companies

1. Amend and supplement Article 1 as follows:

"Article 1. Scope of Regulation

This Circular provides guidance on certain matters regarding the conversion of enterprises holding 100% capital contribution by the State and single-member joint stock companies which are subsidiaries of enterprises holding 100% capital contribution by the State within the Ministry of National Defense into joint stock companies.

2. Amending and supplementing Article 6 as follows:

Article 6. Stock Conversion Process

1. The stock conversion process for enterprises shall be carried out in accordance with the provisions of Clause 23, Article 1 of Decree No. 140/2020/NĐ-CP dated November 30, 2020 of the Government amending and supplementing certain articles of Decree No. 126/2017/NĐ-CP dated November 16, 2017 of the Government on converting state enterprises and single-member joint stock companies with 100% capital contributed by state enterprises into joint stock companies; Decree No. 91/2015/NĐ-CP dated October 13, 2015 of the Government on state capital investment in enterprises and management and use of capital and assets in enterprises; and Decree No. 32/2018/NĐ-CP dated March 8, 2018 of the Government amending and supplementing certain articles of Decree No. 91/2015/NĐ-CP (hereinafter referred to as Decree No. 140/2020/NĐ-CP) and Appendix I attached hereto. 2. The process of reorganizing and handling land at enterprises undergoing stock conversion and preparing land use plans when undergoing stock conversion shall be carried out in accordance with the provisions of Clause 3, Article 30 of Decree No. 126/2017/NĐ-CP, Clause 6, Article 3 of Decree No. 140/2020/NĐ-CP, Article 12 of Decree No. 26/2021/NĐ-CP dated March 25, 2021 of the Government detailing certain provisions of Resolution No. 132/2020/QH14 dated November 17, 2020 of the National Assembly piloting certain policies to resolve difficulties and pending issues in the management and use of defense and security land combined with production and construction activities, and Appendix II attached hereto.

3. Amending and supplementing Article 7 as follows:

"Article 7. Publicizing and transparently disclosing information and listing on the stock market

Joint-stock enterprises undergoing shareholding reform shall publicize and disclose information in accordance with Article 11 of Decree No. 126/2017/ND-CP and Clause 5 of Article 1 of Decree No. 140/2020/ND-CP, and simultaneously post on the Ministry of Defense Economic Sector's electronic portal (www.ckt.gov.vn); report to the State Capitalization Steering Committee for monitoring, guidance, and direction.

"Article 8. Liquidity ratio, in case microfinance organizations have a risk of losing the ability to pay, losing the ability to pay

Article 8. Financial and asset management work

1. At the time of determining the enterprise value

The enterprise shall handle financial matters at the time of determining the enterprise value (prior to organizing advisory services to determine the enterprise value) in accordance with Articles 14, 15, 16, 17, 18, 19, and Article 20 of Decree No. 126/2017/ND-CP; Clauses 8, 9, 10 of Article 1 and Clause 4 of Article 3 of Decree No. 140/2020/ND-CP; and Article 7 of Circular No. 46/2021/TT-BTC dated June 23, 2021, issued by the Minister of Finance guiding certain contents regarding financial handling and determining the enterprise value when transferring state-owned enterprises and limited liability companies wholly owned by state-owned enterprises to joint-stock companies (referred to as Circular No. 46/2021/TT-BTC).

2. At the time of officially becoming a joint-stock company

a) The enterprise shall handle financial matters at the time of officially becoming a joint-stock company in accordance with Article 21 of Decree No. 126/2021/ND-CP and Article 8 of Circular No. 46/2021/TT-BTC;

b) Implement handover, handle debts, and exclude assets from the enterprise value according to Circular No. 07/2022/TT-BTC dated February 9, 2022, issued by the Minister of Finance guiding handover, acceptance, and handling of debts and excluded assets when converting ownership of enterprises, public institutions, and upon designation by the Government and Prime Minister;

c) The handling of enterprise assets during the process of shareholding reform must ensure transparency and compliance with state regulations and the Ministry of National Defense. In cases where there are defense equipment assets, report to the General Staff for the recovery of 100% of weapons, ammunition, and special military equipment back to the superior agency or unit of the enterprise for management. For enterprises directly managed by the Ministry of National Defense, they shall be recovered to strategic warehouses of the Ministry of National Defense upon a decision by the General Staff;

d) State-owned enterprises holding 50% or more of the charter capital may use one military-registered car for command purposes; state-owned enterprises holding less than 50% of the charter capital shall not use military vehicle registration numbers from the date the joint-stock company receives its business registration certificate for the first time.

5. Amend and supplement Clause 2 of Article 9 as follows:

"2. Advisory organizations determining the enterprise value must conduct the determination of the enterprise value according to the asset-based method prescribed in Section 2 Chapter III of Decree No. 126/2017/ND-CP, Clauses 13, 14, 15, 16, 17 of Article 1 of Decree No. 140/2020/ND-CP, and the guidance provided in Circular No. 46/2021/TT-BTC; other valuation methods must ensure scientific accuracy, reflect the true value of the enterprise, and be widely applied internationally, easily understood, and readily used in calculations."

6. Amend and supplement Clause 2 of Article 14 as follows:

"2. The handover between the shareholding reform enterprise and the joint-stock company shall be carried out in accordance with Article 9 of Circular No. 46/2021/TT-BTC."

Article 2. Amend and supplement some articles of Circular No. 156/2019/TT-BQP dated October 15, 2019 issued by the Minister of National Defense guiding the implementation of the transfer of state-owned capital at joint-stock companies where the Ministry of National Defense is the representative owner.

1. Amend and supplement Article 5 as follows:

"Article 5. Capital Transfer Plan

The capital transfer plan includes the following main contents:

1. Legal basis and purpose of the capital transfer.

2. Evaluation of investment capital situation, benefits obtained, and the impact of transferring state-owned capital to enterprises.

3. Financial status, business results of enterprises with state-owned capital contributions, market demand for investing capital into enterprises with transferred state-owned capital, and the expected value to be obtained from the capital transfer.

4. Method of capital transfer (in cases of auctioning in lots, specific reports must be made on the basis for determining the application of auctioning in lots according to the provisions of Government Decree No. 32/2018/NĐ-CP dated March 8, 2018 amending and supplementing some articles of Government Decree No. 91/2015/NĐ-CP dated October 13, 2015 on state capital investment in enterprises and management and use of capital and assets in enterprises).

5. Handling and implementing policies for military personnel, defense workers, and civil servants according to the provisions of Circular No. 139/2018/TT-BQP dated August 30, 2018 issued by the Ministry of National Defense guiding the use and implementation of certain policies for individuals working at military enterprises undergoing shareholding reform or dissolution and bankruptcy; joint-stock companies divesting state capital and joint-stock companies with state capital contributions managed by the Ministry of National Defense (referred to as Circular No. 139/2018/TT-BQP) and other related legal documents.

6. Resolving military license plate vehicles, special military assets, and equipment (if any).

7. Transferring Party organizations and mass organizations to localities according to the regulations of the Central Committee Secretariat, the Central Military Commission, and the General Political Department.

8. Projected time for implementing and completing the capital transfer.

2. Amending and supplementing Article 6 as follows:

Article 6. Method of Capital Transfer

The method of transferring state-owned capital shall be implemented according to the provisions of Article 38 of Government Decree No. 91/2015/NĐ-CP, Clause 16 and 17 of Article 1 of Government Decree No. 32/2018/NĐ-CP, and Clauses 18, 19, and 20 of Article 2 of Government Decree No. 140/2020/NĐ-CP.

3. Amend and supplement Clause 1 of Article 10 as follows:

"1. Determining the initial price for one (1) share according to the guidance provided in Vietnam Valuation Standard No. 12 - Enterprise Valuation Standard issued together with Circular No. 28/2021/TT-BTC dated April 27, 2021 issued by the Ministry of Finance to promulgate Vietnam Valuation Standard No. 12 and other relevant legal documents."

4. Amend and supplement Article 15 as follows:

Article 15. Payment of Proceeds from Share Sale Upon Completion of State Capital Transfer

The representative of state-owned capital pays the proceeds from the state capital transfer to the state budget according to the guidance provided in Circular No. 57/2022/TT-BTC dated September 16, 2022 issued by the Minister of Finance guiding certain provisions of Government Decree No. 148/2021/NĐ-CP dated December 31, 2021 on managing and using revenue from enterprise ownership conversion, public service units, revenue from state capital transfer, and excess paid-in capital over registered capital in enterprises, and reports the results to the Ministry of National Defense (through the Economic Department of the Ministry of National Defense and the Finance Department of the Ministry of National Defense).

5. Amend and supplement Clause 4 of Article 19 as follows:

"4. Implement the collection and payment of state capital transfer revenue according to the provisions of Article 15 of Government Decree No. 148/2021/NĐ-CP dated December 31, 2021 on managing and using revenue from enterprise ownership conversion, public service units, revenue from state capital transfer, and excess paid-in capital over registered capital in enterprises."

6. Amend and supplement Clause 7 of Article 19 as follows:

"7. For wholly state-owned enterprises directly under the Ministry of National Defense with capital investments in joint-stock companies, after the Ministry of National Defense approves the policy allowing the transfer, the enterprise shall implement the capital transfer according to the provisions of the Law on Management and Use of State Capital Investment in Production and Business Enterprises and other related regulations. In cases where the transfer value is lower than the book value of the enterprise after deducting the provision for investment loss, the enterprise must report to the Ministry of National Defense for review and direction."

Article 3. Effectiveness

1. This Circular takes effect from March 2, 2024.

2. In cases where the cited documents in this Circular are amended, supplemented, or replaced, they shall be applied according to the amended, supplemented, or replacement documents.

Article 4. Responsibilities for Implementation

1. The Chief of General Staff, Director of the General Political Department, Heads of agencies and units, Chairmen of companies of enterprises holding 100% state-owned registered capital, representatives of state-owned capital, and related organizations and individuals are responsible for implementing this Circular.

2. The Economic Department of the Ministry of National Defense is responsible for coordinating with relevant agencies to implement, monitor, supervise, and report to the Minister of National Defense./.