Decree No. 101/2009/ND-CP on Pilot Establishment, Organization, Operation, and Management of State Economic Groups

 

 

 

DECREE

Pilot establishment, organization, operation, and management of state-owned economic groups

THE GOVERNMENT

Based on the Government Organization Law dated December 25, 2010;

Pursuant to the State Enterprise Law dated November 26, 2003;

Pursuant to the Enterprise Law dated November 29, 2005;

The Prime Minister issues this Decision on principles, criteria, and allocation standards for state budget investment capital development phase 2016-2020.

DECREE:

Chapter 1.

GENERAL PROVISIONS

Article 1. Objectives and requirements for piloting the establishment of state-owned economic groups

1. Concentrating investment and mobilizing resources to form large-scale company groups in key industries and sectors that need development, enhancing competitiveness and international economic integration.

2. Ensuring major balances in the national economy; applying high technology; driving development in other industries and sectors and the entire economy.

3. Promoting value chain linkages, developing other economic components.

4. Strengthening effective management and supervision over state capital and assets invested in enterprises within the group.

5. Creating a basis for further improving mechanisms, policies, and laws regarding economic groups.

Article 2. Scope of Regulation

This Decree provides for:

1. Establishment of state-owned economic groups;

2. Organization, operation, management, and administration within state-owned economic groups;

3. Management and supervision of the implementation of rights and obligations of state owners towards state-owned economic groups.

Article 3. Applicability

The objects subject to this Decree are state-owned economic groups established by the Prime Minister's decision in the following main business sectors:

1. Postal services, telecommunications, and information technology;

2. Shipbuilding and ship repair;

3. Production, transmission, distribution, and trading of electricity;

4. Exploration, exploitation, processing, and distribution of oil and gas;

5. Exploration, exploitation, processing, and distribution of coal and minerals;

6. Textile and garment;

7. Rubber planting, harvesting, and processing;

8. Production and trading of fertilizers and chemical products;

9. Investment and real estate trading;

10. Construction industry and machinery manufacturing;

11. Finance, banking, and insurance;

12. Other sectors as decided by the Prime Minister.

Article 4. State-owned economic groups

1. State-owned economic groups established under this Decree through pilot programs consist of large-scale companies linked in the form of parent company - subsidiary companies and other forms, forming a tightly integrated and long-term combination of enterprises with close ties in economic interests, technology, markets, and other business services.

2. State-owned economic groups include:

a) Parent company (referred to as first-tier enterprise) is an enterprise holding 100% of the charter capital or having controlling power as decided by the Prime Minister;

b) Subsidiaries of the first-tier enterprise (referred to as second-tier enterprises) are enterprises controlled by the first-tier enterprise; organized in the form of joint-stock companies, limited liability companies with one or more shareholders, holding companies in the form of parent company - subsidiary company, joint ventures (in cases not re-registered according to the Enterprise Law), overseas subsidiaries.

c) Subsidiaries of the second-tier enterprise and subsequent levels;

d) Associated enterprises of the group include: enterprises with minority stakes held by the parent company and subsidiaries; enterprises without stakes held by the parent company and subsidiaries, voluntarily participating in associations in the form of association contracts or without such contracts, but having long-term ties in economic interests, technology, markets, and other business services with the parent company or member enterprises in the group.

3. The parent company and member enterprises of the group have legal personality; own separate capital and assets; have the right to possess, use, and dispose of their assets in accordance with the law and the common agreement of the group. The State is the direct owner of state capital directly invested in the parent company. The parent company is the owner of state capital in subsidiaries and associated enterprises.

Article 5. Name and Business Registration

1. The State-owned Economic Group shall have its own name, logo, and brand. The Prime Minister decides on the name of the State-owned Economic Group and the name of the pilot parent company established under this Decree.

2. Member enterprises shall conduct business registration in accordance with the law. The naming of member enterprises organized in the form of joint-stock companies or limited liability companies shall be carried out in accordance with the Law on Enterprises and related laws.

Article 6. Interpretation of terms

In this Decree, the following terms are understood as follows:

1. "Main business activity of the enterprise" refers to the business activity established from the purpose of investment establishment and the enterprise's development strategy, stipulated by the owner and assigned to the enterprise to implement at the time of establishment and throughout the enterprise's operation.

2. "Business activities related to the main business activity of the enterprise" (referred to as related business activities) are auxiliary or derivative business activities from the main business activity based on the conditions and advantages of the main business activity or utilizing the advantages and strengths of the main business activity and directly serving the main business activity.

3. "Business activities unrelated to the main business activity of the enterprise" (referred to as unrelated business activities) are business activities that do not derive or develop from the main business activity or from business activities related to the main business activity.

4. "Affiliation Contract" is a contract for using trademarks, franchising, or long-term affiliation with the group's logo.

5. "Related party of the parent company" refers to organizations or individuals having direct or indirect relationships with the parent company as prescribed in Clause 17, Article 4 of the Law on Enterprises.

6. "Member enterprises of the group" are enterprises directly held by the parent company, subsidiaries of the parent company, or subsequent levels of subsidiaries with 100% of the charter capital, or holding controlling shares or contributions; maintaining control over such enterprises.

7. "Control rights" refer to the rights of one enterprise over another enterprise, including at least one of the following rights:

a) The rights of the sole owner of the enterprise;

b) The rights of shareholders or contributors holding controlling shares or contributions of the enterprise;

c) The right to directly or indirectly appoint a majority or all members of the Board of Directors or Management Board, General Director of the enterprise;

d) The right to approve, amend, or supplement the Articles of Association of the enterprise;

đ) Other controlling cases agreed upon between the controlling enterprise and the controlled enterprise and recorded in the Articles of Association of the controlled enterprise.

Article 7. Party Organization and Political-Social Organizations in the State-Owned Economic Group

1. The Communist Party of Vietnam organization within the State-Owned Economic Group operates in accordance with the Constitution, laws, and the Charter of the Communist Party of Vietnam.

2. Political-social organizations within the State-Owned Economic Group operate in accordance with the Constitution, laws, and their respective Charters, consistent with legal provisions.

3. The State-Owned Economic Group creates favorable conditions and supports the Party organization, Trade Union, and other political-social organizations to operate in accordance with the law and their respective Charters.

Article 8. Application of Relevant Laws and International Treaties

1. The establishment, organization, operation, and management of state-owned economic groups shall be governed by the provisions of this Decree, the Enterprise Law, the State-Owned Enterprise Law, the Competition Law, and other relevant laws.

2. In cases where international treaties to which the Socialist Republic of Vietnam is a party provide different provisions from those stipulated in this Decree, such treaties shall prevail.

Chapter 2.

ESTABLISHMENT OF STATE-OWNED ECONOMIC GROUPS

Article 9. Methods for Establishing State-Owned Economic Groups

The Prime Minister decides on the establishment of state-owned economic groups based on state-owned corporations and companies meeting the conditions specified in Article 10 of this Decree.

Article 10. Conditions for Establishing State-Owned Economic Groups

Proposed state-owned economic groups must meet the following conditions:

1. Engaging in main business activities as prescribed in Article 3 of this Decree, with the ability to develop based on these main business activities and related ones;

2. Ensuring the conditions regarding industry structure as stipulated in Article 16 of this Decree;

3. The parent company must satisfy the following requirements:

a) The registered capital of the parent company must not be lower than the minimum capital requirement for parent companies of state-owned economic groups in each industry and field as decided by the Prime Minister;

b) Possessing human resources with sufficient qualifications, experience, and business capabilities in the main business activities and related ones, capable of managing investment capital and coordinating the operations of member enterprises and associated enterprises;

c) Having the capability to utilize technological secrets, brands, and markets to control subsidiary companies and establish associations with other associated enterprises;

d) Possessing financial resources or having feasible plans to mobilize financial resources to ensure adequate capital investment in subsidiary companies and other associated enterprises.

4. Enterprises expected to become member enterprises of state-owned economic groups may undergo conversion, have plans for conversion, or have already converted to operate under the form of joint-stock companies or limited liability companies as regulated by the Enterprise Law.

Article 11. Procedures and Formalities for Building and Implementing Proposals for Establishing and Developing State-Owned Economic Groups

1. Permission to Develop Proposals: Based on the Government's regulations concerning industries and fields piloting the establishment of state-owned economic groups, the Prime Minister decides on the agency or organization responsible for developing pilot proposals for establishing state-owned economic groups.

2. Development and Submission of Proposals: The agency or organization tasked by the Prime Minister to develop pilot proposals for establishing state-owned economic groups is responsible for organizing the development of proposals for establishing state-owned economic groups; soliciting opinions from the Ministries specified in point d of this clause; submitting the proposals to the Prime Minister for approval. The proposal submission package for the Prime Minister's approval includes:

a) A report on the proposal for establishing a state-owned economic group;

b) The proposal for establishing a state-owned economic group

The proposal includes the following basic contents: the necessity and purpose of establishing a state-owned economic group; the current organizational structure, management, and operations of state-owned corporations, the structure of member enterprises and associated enterprises; methods for building, maintaining, and developing forms of association between the corporation, the parent company, and member enterprises and associated enterprises, and among member enterprises and associated enterprises; methods for forming the parent company; the legal form, name, organizational structure, and management of the parent company; the name, legal form, and organizational structure of member enterprises; main business activities and related ones; investment structure in main business activities, related ones, and unrelated ones within the state-owned economic group; plans for utilizing and developing leadership and management human resources at the parent company; human resources performing the function of representing the owner at member enterprises; plans for arranging and utilizing human resources; operational plans for the state-owned economic group after establishment; long-term strategic development directions for the group; organization, management, and operation within the state-owned economic group; representation of the state owner for the parent company of the economic group; suggestions to the state owner in forming the economic group; plans and timelines for conversion and formation of the group;

c) Draft Articles of Association of the parent company of the state-owned economic group;

d) Opinions on the proposal from the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry managing the industry (in case the proposing agency is a Corporation established by the Prime Minister's decision), the Ministry of Home Affairs, and the Ministry of Labor, Invalids, and Social Affairs.

3. Approval of Proposals: The Prime Minister considers and decides on approving proposals for establishing state-owned economic groups. The approval decision for proposals for establishing state-owned economic groups must clearly specify the content of supervision over implementation of the proposals, responsibilities of agencies, organizations, and individuals supervising the implementation of the proposals, resolving arising issues, and adjusting the proposals (if necessary).

4. Implementation of Proposals for Establishing State-Owned Economic Groups:

a) The Prime Minister decides on the establishment of the parent company; appoints the Chairman and members of the Board of Directors of the parent company;

b) The Board of Directors of the parent company directly bears responsibility for implementing the proposals; developing forms of association within the parent company-subcompany group and among member enterprises during the implementation of the proposals and the operations of the economic group.

Chapter 3.

MANAGEMENT AND OPERATION WITHIN STATE-OWNED ECONOMIC GROUPS

PART 1. MANAGEMENT AND OPERATIONS OF STATE OWNED ECONOMIC GROUPS

Article 12. Principles for Managing and Operating State Owned Economic Groups

Management and operation of state owned economic groups shall be carried out through one or more of the following methods:

1. Through the parent company.

2. Through investment forms and joint ventures.

3. Through agreements and cooperation in using common services throughout the group; implementing common regulations, standards, and norms within the group in accordance with the law; using each other's products and services according to market principles.

4. Other methods as prescribed by law and consistent with the Articles of Association of member enterprises.

Article 13. Management and Operation of State Owned Economic Groups through the Parent Company

1. The parent company represents the state owned economic group in carrying out common activities of the group in relations with third parties both domestically and internationally or other activities on behalf of the group as agreed between member enterprises and relevant laws.

2. The parent company uses its rights and obligations as the owner of capital at member enterprises and the rights of shareholders or members to coordinate and guide the operations of the state owned economic group:

a) Utilizing the management and operation system at the parent company or establishing a separate department to study, plan strategies, propose solutions for coordination and guidance of activities stipulated in Clause 3 of this Article to submit to the Board of Directors of the parent company for approval; through authorized representatives at member enterprises and associated enterprises to implement coordination and guidance contents stipulated in Clause 3 of this Article.

b) Through the implementation of economic contracts and joint venture contracts with member enterprises and associated enterprises to coordinate and guide the operations of the state owned economic group.

c) Establishing unified regulations within the state owned economic group.

3. Contents of coordination and guidance by the parent company include:

a) Building and organizing the implementation of the development strategy, joint business plans of the group; guiding the business strategies of subsidiaries according to the group's development strategy; joint business plans of the group; building and organizing the implementation of management and operation regulations and unified standards and norms within the group.

b) Classifying member enterprises based on their positions and importance in the group's overall development strategy; determining the list of main industries and key member enterprises; guiding member enterprises according to their main industries; managing and guiding representatives to ensure the controlling power of the parent company at key enterprises, preventing acquisition by other economic groups or enterprises.

c) Guiding medium-term and long-term production and business plans of member enterprises.

d) Guiding operational goals, investment targets, production and business performance indicators; dividing tasks, specializing, cooperating, accessing, expanding and sharing markets, exporting, using brands, information services, scientific and technological research and application, training and other activities of member enterprises according to the group's general policy.

đ) Building and implementing group brand management regulations; guiding common elements in the names of member enterprises and associated enterprises.

e) Guiding organizational structure and personnel for subsidiaries.

g) Guiding the content of the Articles of Association, supervising the subscribed capital structure of subsidiaries.

h) Appointing authorized representatives to participate in management and operations at subsidiaries. Issuing and implementing regulations on appointment, replacement, supervision, and evaluation of the activities of authorized representatives; specifying issues that must be approved by the parent company before the authorized representative makes decisions or participates in decision-making at member enterprises and associated enterprises.

i) Serving as a central point to aggregate resources from member enterprises and associated enterprises to conduct bidding and implement joint projects agreed upon and implemented by member enterprises and associated enterprises.

k) Implementing and providing research, technology transfer, marketing, trade promotion, and other services for member enterprises and associated enterprises.

l) Coordinating the formation, management, and effective use of common funds; financial monitoring and risk control; supporting financial activities of member enterprises within the group when requested by these enterprises.

m) Coordinating the execution of administrative tasks and transactions with partners for member enterprises within the group when requested by these enterprises; performing public service tasks and other tasks assigned by the State to the group.

n) Establishing and connecting the information network of all member enterprises and associated enterprises in the group.

o) Preparing consolidated financial reports of the parent company and subsidiaries.

p) Consulting member enterprises and associated enterprises in conducting common activities.

q) Organizing the implementation of supervision, regulation, and coordination among departments within the parent company.

r) Other activities appropriate to the characteristics of each state owned economic group, relevant laws, the Articles of Association of the parent company and member enterprises and associated enterprises in the group.

4. The parent company and member enterprises and associated enterprises have the rights and obligations of enterprises as prescribed by law; bear legal responsibility for their own production and business activities; are bound by contractual rights and obligations and agreements between enterprises.

5. Coordination and guidance within the group must be consistent with the provisions of the law; the charters of member enterprises and associated enterprises; the rights of the owner at the parent company or agreements between the parent company and member enterprises and associated enterprises; the position of the parent company in each coordinated activity with member enterprises and associated enterprises.

In cases where the parent company abuses its position, intervenes beyond the authority of the owner, members, shareholders, or contrary to the links and agreements between member enterprises of the group, causing harm to the interests of member enterprises and related parties, the parent company and those related parties shall bear responsibility as stipulated in Clauses 3, 4, 5, and 6 of Article 147 of the Enterprise Law and other relevant legal provisions.

Article 14. Responsibilities of the Parent Company in Managing and Operating State-Owned Economic Groups

1. Shall be responsible before the state owner for ensuring the business objectives of the main industry and other objectives assigned by the state to the group. Subject to supervision by the representative of the state owner regarding the investment portfolio, investment projects in financial, banking, insurance, securities, real estate sectors (except for groups operating in these sectors).

2. Manage the investment portfolio at the parent company to ensure conditions for investment and industry structure as prescribed in Article 16 of this Decree; monitor and supervise the investment portfolio of the parent company at subsidiaries; monitor and supervise the business industries of subsidiaries.

3. Provide information and report on the contents prescribed in Clause 2 of Article 41 of this Decree.

4. Establish an organization to provide services for group member enterprises.

5. Report to competition management agencies and be subject to supervision by such agencies regarding economic concentration within the group.

6. Fulfill the obligations of an enterprise in accordance with the legal form registered and other obligations as prescribed by law.

7. Develop and implement a system for evaluating the performance of authorized representatives at member enterprises. The performance evaluation system for authorized representatives must meet the following requirements:

a) Have key indicators for each position;

b) Periodically evaluate performance;

c) Have an incentive mechanism;

d) Have disciplinary measures for violations.

8. Develop and implement human resource management policies at the parent company and for authorized representatives at member enterprises. Human resource management policies must include:

a) Standards for experience and management qualifications;

b) Methods and procedures for selecting (including competitive examinations), appointing leadership positions under the authority of the parent company; selecting and nominating candidates for the competent authority to choose and appoint leadership positions of the parent company; selecting and nominating candidates for the board of directors; board of members of that enterprise; selecting (including competitive examinations), appointing representatives of the parent company's shareholding in other enterprises;

c) A system for evaluating management performance applied to key leaders and managers at the parent company, subsidiaries, and authorized representatives at member enterprises throughout the group;

d) Principles and methods of remuneration and bonuses with competitiveness;

đ) Disciplinary measures for violations

9. Guide subsidiaries to establish centralized funds and unified management and accounting systems.

Article 15. Management and operation within state-owned economic groups shall be carried out through forms of investment, linkage, transactions, and information exchange.

Members of state-owned economic groups may use the following forms to ensure the connectivity between member enterprises in internal management and operation:

1. Investment, purchase, sale of products and services; technological support; brand development among member enterprises.

2. Agreement on internal group credit mechanisms; credit guarantee mechanisms; formation of centralized funds;

3. Organizing meetings or consultation sessions;

a) Between managers and operators at the parent company and their authorized representatives at member enterprises to provide guidance, regulate, and coordinate activities stipulated in Clause 3, Article 13 of this Decree and implement important strategic orientations of the group;

b) Between functional departments of the parent company and those of member enterprises to implement specialized issues.

4. Transfer of authorized representatives who are leadership cadres among subsidiaries.

Article 16. Provisions on investment restrictions and business fields in state-owned economic groups

1. A controlled enterprise shall not purchase shares or contribute capital to an enterprise holding control within the same state-owned economic group.

2. The investment of capital outside the parent state-owned enterprise shall be implemented according to the Financial Management Regulations of State-Owned Enterprises and the Management of State Capital Invested in Other Enterprises issued together with Decree No. 09/2009/NĐ-CP dated February 5, 2009 of the Government.

3. The parent company and member enterprises of the group may register business fields in accordance with the provisions of the law, but must focus investments and business operations in main business fields and related business fields; subject to supervision by the state owner's representative regarding investment, investment ratio, and investment effectiveness in main business fields, related business fields, and unrelated business fields.

The state owner's representative decides on conducting business in main business fields; decides on adjusting or changing main business fields; supervises business in main business fields, related business fields, and unrelated business fields.

4. In cases where the parent company directly or through subsidiaries engages in non-related business fields, the following conditions must be ensured:

a) Completion of assigned tasks in main business fields; non-related business does not affect the tasks in main business fields and the expansion and development of main business fields;

b) Utilize the activities and results of non-related business to support and develop main business fields;

c) Fulfill reporting obligations and be subject to supervision by the state owner's representative regarding investment, investment effectiveness, and the impact of non-related business on main business fields.

PART 2. FUNCTIONS, RIGHTS, DUTIES, MANAGEMENT ORGANIZATION OF THE PARENT COMPANY

Article 17. Functions, management organization, and activities of the parent company

1. The parent company performs the function of directly producing and trading, or only investing financially.

2. The management organization and activities of the parent company shall be carried out in accordance with the Charter approved by the Prime Minister, the Financial Management Regulations approved by the competent state agency, and relevant laws.

Article 18. Rights of the parent company

1. Rights of the parent company over capital and assets:

a) To possess and use the company's capital and assets for business purposes and to realize lawful benefits from the company's capital and assets;

b) To dispose of the company's capital and assets in accordance with the provisions of the law;

c) To use the capital and assets under its management to invest outside in accordance with this Decree and the law on investment;

d) To manage and use the assets and resources allocated or leased by the State, including land and natural resources, in accordance with the law on land and natural resources;

đ) The State shall not transfer state-owned capital invested in the parent company and the parent company’s capital and assets without payment, except in cases where the restructuring of the parent company is decided or the provision of public goods and services is implemented;

2. Rights of the parent company in business operations:

a) To independently organize production and trade, coordinate production and trade plans, establish management structures according to business requirements and ensure effective business operations;

b) To engage in industries, professions, and fields specified in the business registration certificate; expand the scale of business operations according to the capacity and demand of the domestic and international markets in compliance with this Decree;

c) To seek domestic and foreign markets and customers and conclude contracts;

d) To determine the purchase price and selling price of products and services, except for public goods and services and those priced by the State;

đ) To decide on investment projects in accordance with the law on investment, using the parent company's capital and assets for joint ventures, joint operations, and contributing capital to enterprises; leasing, purchasing part or all of other domestic and foreign companies;

e) To organize the selection of contractors in accordance with the law on bidding and apply it to pilot state economic groups as stipulated in Clause 5 of this Article;

g) To use the state capital recovered from the privatization, partial or full sale of capital that the parent company has invested in subordinate units, subsidiaries, or associated companies, in accordance with the law;

h) To decide on establishing new subsidiaries, reorganizing, dissolving, or converting ownership of wholly owned limited liability subsidiaries with each subsidiary's charter capital up to 50% of the total asset value recorded in the parent company's most recent financial report; wholly owned limited liability subsidiaries of subsidiaries held 100% by the parent company; subordinate units of the parent company; branches and representative offices of the parent company within and outside the country, in accordance with the law, after obtaining approval from the Prime Minister;

i) To jointly establish new subsidiaries or associated companies with domestic and foreign investors in the form of limited liability companies, joint-stock companies, or foreign-invested companies, with the parent company's shareholding or contribution in each company up to 50% of the total asset value recorded in the parent company's most recent financial report. In cases where state budget funds are used, approval from the Prime Minister is required;

k) To decide to lease part or all of another company; to purchase part or all of another company with a capital amount up to 50% of the total asset value recorded in the parent company's most recent financial report, after obtaining approval from the Prime Minister; to accept other companies voluntarily joining the group;

l) To select and sign labor contracts; to arrange, use, train, reward, discipline, terminate labor contracts; to choose wage and bonus forms for workers based on production and business efficiency and labor, wage, and remuneration laws and Clause 5 of this Article;

m) To develop, issue, and apply economic and technical standards, labor norms, wage rates, and other costs to ensure business efficiency and comply with the law;

n) To have other production and business rights according to market needs and in compliance with the law;

3. Rights of the parent company in finance:

a) To raise capital for business through issuing bonds, promissory notes, company bills; borrowing from credit organizations and other financial institutions; borrowing from employees and other forms of raising capital in accordance with the law;

Capital-raising for business shall be conducted on the principle of self-responsibility for repayment, ensuring the effectiveness of raised capital usage, and not changing the form of ownership of the parent company. If the parent company raises capital for ownership conversion, it must obtain the owner's consent and follow the law;

b) To independently use capital for the parent company's business activities; to establish, use, and manage the parent company's funds in accordance with the law and the characteristics of the main industry and field of business;

c) To decide on depreciation of fixed assets based on the principle that the minimum depreciation rate must cover tangible and intangible wear and tear of fixed assets and not be lower than the minimum depreciation rate prescribed by the Government;

d) To enjoy subsidies, price supports, or other preferential policies from the State when performing public service, national defense, security, disaster prevention tasks, or providing products and services at state-set prices that do not cover the production costs of these products and services.

d) Be entitled to receive rewards for innovative ideas, improvements in technology, management, and technology; productivity enhancement awards; and cost-saving awards. These reward amounts shall be recorded as business expenses of the parent company and implemented once with a maximum reward level not exceeding the effectiveness of the innovative ideas, technological improvements, management, and technology enhancements, increased productivity, and cost savings achieved within one year.

e) Enjoy investment incentives and reinvestment benefits as prescribed by law; exercise ownership rights over the capital invested in subsidiaries and other enterprises;

g) Not subject to corporate income tax on profits derived from contributions to subsidiaries and other enterprises if such subsidiaries and enterprises have already paid corporate income tax before distributing profits to investors and are not subject to double taxation or other forms of consolidation;

h) Refuse and report any requests for resources that are not stipulated by law from any individual, agency, or organization, except for voluntary contributions for humanitarian and public welfare purposes;

i) After fulfilling tax obligations, transferring losses according to the Law on Corporate Income Tax and other financial obligations as prescribed by law; establishing a financial reserve fund, the remaining profit shall be distributed and utilized as prescribed by law. In cases where the parent company still owes maturing debts that have not been fully repaid, salary increases and bonuses for parent company employees, including managers, can only be granted after all due debts have been settled;

k) Be entitled to establish centralized financial funds, including special-purpose funds for specific tasks in the main business sector as prescribed by relevant laws. The establishment and use of these funds shall be regulated by the parent company's financial management charter approved by the Ministry of Finance;

l) Provide guarantees, collateral, and credit endorsements for subsidiaries to borrow funds from domestic and foreign credit organizations and banks as prescribed by law;

m) Have other financial rights as prescribed by law;

4. Rights to participate in public welfare activities of the parent company:

a) Produce and supply public welfare products and services based on bidding. For public welfare activities under government orders or plans, the parent company has the obligation to consume products and provide public welfare services to the designated recipients at prices and fees set by the State;

b) For public welfare tasks assigned by the State, the parent company shall be guaranteed corresponding material conditions;

For products and services carried out through bidding, the parent company shall cover costs according to the bid price;

For public welfare products and services ordered by the State, the parent company may use fees or revenues from providing products and services according to State orders to offset reasonable costs for public welfare activities and ensure employee benefits. If insufficient, the State will subsidize the difference;

c) Establish and apply cost standards, wage rates in implementing production and supply tasks for public welfare products and services;

5. Other rights of the parent company:

a) The parent company and its subsidiaries may implement competitive bidding methods in purchasing goods that are outputs of one enterprise but inputs for another within the group;

Subsidiaries of the parent company have the right to participate in bidding for projects in the main business sector of the parent company and other subsidiaries within the economic group;

b) The parent company has the right to determine the pay scale, wage rates, and remuneration systems for employees and managerial staff based on the national minimum wage regulations, except for positions such as Chairman, Board Member, General Director, Deputy General Directors, and Chief Accountant. The parent company may independently determine wage rates according to the principle of average wage growth being lower than productivity growth and register with the competent state labor-management authority;

c) For economic groups whose main business is large and important mineral resource exploitation, the parent company may be entrusted with the function of managing mineral resources (mine owner) according to the Prime Minister's decision to organize member enterprises to exploit resources in accordance with the group's overall planning and strategy. The parent company is subject to state management by the competent state authority on mineral resources and has the obligation to ensure the right to operate, exploit, and use mineral resources for member enterprises in accordance with the law on mineral resources;

d) For economic groups given land by the State for long-term industrial crop development, the parent company uniformly manages land within the group to allocate for member enterprises' production according to the land use plan approved by the Government. The parent company is subject to state management by the competent state authority on land and has the obligation to ensure the right to operate, exploit, and use land for member enterprises in accordance with the law on land.

Article 19. Obligations of the Parent Company

1. Implementing the objectives and main tasks assigned by the State; managing and using the allocated and leased resources reasonably and effectively; protecting the environment; complying with relevant laws and regulations.

2. Obligations regarding capital and assets:

a) Safeguarding and developing the state investment capital at the parent company and the self-raised capital of the parent company;

b) Being responsible for the debts and other property obligations of the parent company within the scope of its assets;

c) Periodically re-evaluating the assets of the parent company in accordance with the provisions of the law.

3. Obligations in business operations:

a) Operating in the registered industries and professions, ensuring the quality of products and services provided by the company according to the registered standards;

b) Modernizing technology and management methods to enhance efficiency and competitiveness;

c) Ensuring the rights and interests of employees and their right to participate in company management as stipulated by law;

d) Adhering to the State's regulations on national defense, security, culture, public order, safety, resource protection, and environmental protection;

đ) Implementing accounting, auditing, and financial reporting systems as prescribed by law and the requirements of the state owner;

e) Being accountable to the Government and the Prime Minister for the use of capital to establish other enterprises;

g) Implementing risk management and insurance for the assets, liabilities, and personnel of the parent company during production and business operations as prescribed by law;

h) Being subject to state supervision in implementing regulations on salary scales, unit prices, wage payment systems for employees, Chairperson, Board of Directors members, General Director, Deputy General Directors, Chief Accountant, and other managerial staff;

i) Being subject to supervision and inspection by the state owner as prescribed in this Decree and related laws; complying with decisions on inspections made by financial authorities and competent state agencies as prescribed by law;

k) Fulfilling other business obligations as prescribed by law;

4. Financial obligations:

a) Financial autonomy, balancing revenues and expenditures; operating efficiently, ensuring profit rate targets set by the state owner; registering, declaring, and paying taxes fully; fulfilling obligations to the owner and other financial obligations as prescribed by law;

b) Managing and using effectively: business capital including the portion invested in other companies; natural resources, land, and other resources allocated or leased by the State;

c) Using capital and other resources to fulfill special tasks when requested by the State;

d) Fully complying with capital management systems, asset management, funds, accounting, and auditing systems as prescribed by law; being responsible for the truthfulness and legality of the company's financial activities;

đ) Implementing annual financial reporting and financial transparency, providing necessary information to assess the true effectiveness of the company's operations;

e) Fulfilling other obligations as prescribed in the company's financial management charter and other laws;

5. Obligations when participating in public service activities:

a) Providing public services assigned or ordered by the State in accordance with the specified quantity, price, and fees set by the State;

b) Accepting public service tasks assigned or ordered by the State and subcontracting part or all of these tasks to subsidiary companies as prescribed by the State;

c) Implementing contracts and business accounting as prescribed by law; being accountable to the State for the results of the company's public service activities; being accountable to customers and the law for public products and services directly provided and supplied by the company;

d) Providing sufficient quantities of public products and services, ensuring quality, correct target groups, and timely delivery;

đ) Fulfilling other public service obligations as prescribed by law.

Article 20. Management organizational structure of the parent company

1. The parent company has a Board of Directors, General Director, Supervisory Board, and administrative staff, except for cases provided for in Clause 2 of this Article.

2. For parent companies operating in special industries or sectors, the management organizational structure of the parent company shall be decided by the Prime Minister.

Article 21. Board of Directors of the parent company

1. The Board of Directors is the direct representative body of state ownership at the parent company, performing the rights and obligations of the owner towards enterprises fully invested with charter capital by the parent company and towards the share capital contributed by the parent company in other enterprises.

2. The Board of Directors has the right to decide on all matters related to determining and implementing the objectives, tasks, and benefits of the parent company, except for issues within the authority and responsibility of the Government, the Prime Minister, or delegated to other agencies or organizations representing the owner as stipulated in this Decree.

3. The Board of Directors of the parent company is directly responsible to the Prime Minister and the law for all activities of the parent company.

4. The Board of Directors consists of from five to nine members appointed, reappointed, relieved, replaced, rewarded, or disciplined by the Prime Minister upon the proposal of the Minister managing the industry. The term of office of Board members is five years. Board members may be reappointed. The Prime Minister decides the composition of Board members, the number of full-time or part-time members according to each state-owned economic group.

Article 22. Tasks and powers of the Board of Directors of the parent company

1. Accepting, managing, and using effectively the capital, land, resources, and other sources invested by the owner in the parent company and the state-owned economic group.

2. Building and submitting to the Prime Minister for approval to decide and implement the long-term strategy and plan of the parent company; deciding the annual plan of the parent company after receiving comments from the Ministry managing the industry; deciding the long-term strategy, plans, and business sectors of wholly-owned subsidiaries.

3. Deciding investment projects within the long-term development planning of the state-owned economic group approved by the Prime Minister; delegating to the General Director of the parent company and representatives of the parent company's share capital in other enterprises to decide on investment projects within the approved plan.

4. Deciding investment projects, capital contributions, purchasing shares of other companies, selling assets of the parent company valued up to 50% of the remaining total asset value recorded in the parent company’s latest financial report and in accordance with the law.

5. Deciding loan contracts, lending contracts, leasing contracts, and other economic contracts exceeding the registered capital of the parent company in compliance with the law.

6. Deciding organizational management schemes, business organization, staffing, and utilization of the management system, internal management regulations of the company, labor training planning, establishment of branches, and representative offices of the parent company based on proposals from the General Director.

7. Deciding appointments, reappointments, dismissals, removals, rewards, punishments, signing contracts, and terminating contracts for the General Director after obtaining the Prime Minister's approval; deciding the salary level of the General Director; appointing, reappointing, dismissing, removing, rewarding, punishing, and deciding salary levels for Deputy General Directors and Chief Accountants based on proposals from the General Director.

8. Deciding appointments, reappointments, dismissals, removals, rewards, and punishments for members of the Board of Directors or Chairpersons of wholly-owned limited liability companies by the parent company holding 100% of the charter capital, based on proposals from the parent company's General Director; approving for the Board of Directors or Chairperson of the wholly-owned limited liability company to appoint, reappoint, dismiss, remove, reward, and punish the General Director or Director of that company.

9. Appointing representatives of the parent company's share capital in other enterprises based on proposals from the General Director.

10. Deciding or delegating to the General Director to decide on capital mobilization plans for business operations without changing the form of ownership.

11. Approving the following annual financial reports:

a) Annual financial report of the parent company;

b) Annual financial report of wholly-owned limited liability company subsidiaries;

c) Annual financial report of affiliated units, scientific research and technology enterprises, and training institutions;

d) Consolidated annual financial report of the state-owned economic group.

12. Deciding wage scales, unit prices, wage systems for employees and managers based on provisions in point b, Clause 5, Article 18 of this Decree; deciding the establishment and use of centralized funds of the parent company in accordance with the Company Charter and financial management regulations of the parent company.

13. Approving the use of post-tax profits or handling losses during the business process proposed by the General Director in accordance with the parent company's financial management regulations.

14. Organizing inspections and supervision of the General Director, Deputy General Directors, Directors of affiliated units, Institute Directors, and School Principals in the performance of their functions and duties in accordance with the Law on State-Owned Enterprises, the Enterprise Law, and the Company Charter.

15. Organizing inspections and supervision of the Board of Directors or Chairpersons, Supervisors of wholly-owned limited liability companies by the parent company holding 100% of the charter capital, and representatives of the parent company's share capital in other enterprises in the performance of their functions and duties assigned by the owner in accordance with the parent company's Company Charter and the Company Charter of the wholly-owned limited liability company, enterprises with the parent company's share capital, and relevant laws.

16. Deciding issues within the authority of the parent company as stipulated in point h, Clause 2, Article 18 of this Decree after obtaining the Prime Minister's approval.

17. Exercise the rights and obligations of the owner towards companies in which the parent company holds 100% of the charter capital; shares or contributions in enterprises where the parent company has shares or contributions.

18. Recommend to the owner to decide or approve decisions on matters within the authority of the state owner over the parent company.

19. Approve for the General Director to decide:

a) Signing economic contracts, cooperation agreements according to the classification of the Board of Directors;

b) Guaranteeing each loan of subsidiaries with a value exceeding the charter capital of the requesting subsidiary to implement approved investment projects or to carry out coordinated production and business plans under signed contracts;

c) Contributing capital to establish new joint-stock companies or limited liability companies with two or more members according to the classification of the Board of Directors;

d) Leasing contracts, rental contracts; loans, lending contracts with a value exceeding the charter capital of subsidiaries held 100% by the parent company according to the classification of the Board of Directors;

đ) Appoint managerial positions according to the classification of the Board of Directors.

20. The Board of Directors issues regulations on classification by field of activity for the General Director, Unit Directors, scientific and technological research enterprises, and training institutions of the company, and representatives of the parent company's capital in other enterprises.

21. Organize the implementation of restructuring and transformation of the parent company and the group according to the plan approved by the Prime Minister; decide and organize the implementation of the parent company's rights stipulated in Clause 5, Article 18 of this Decree.

Article 23. Chairman of the Board of Directors of the Parent Company

1. The Chairman of the Board of Directors does not concurrently hold the position of General Director of the parent company.

2. The Chairman of the Board of Directors has the following powers and duties:

a) On behalf of the Board of Directors, sign to receive capital, land, natural resources, and other resources invested by the owner in the parent company and the state economic group; manage the parent company according to resolutions and decisions of the Board of Directors.

b) Establish programs and plans for the activities of the Board of Directors; decide on the program, content, and materials for meetings; convene and chair meetings of the Board of Directors;

c) On behalf of the Board of Directors or authorize other members of the Board of Directors to sign resolutions and decisions of the Board of Directors;

d) Organize the monitoring and supervision of the implementation of Board of Directors' resolutions and decisions; have the right to suspend decisions of the General Director that contravene Board of Directors' resolutions and decisions;

đ) Organize research and draft development strategies, long-term plans, investment projects within the decision-making authority of the Board of Directors or the Board of Directors to submit to the Prime Minister for approval; organizational reform plans and key personnel changes of the parent company to be submitted to the Board of Directors;

e) Other rights according to the classification and delegation of the Board of Directors and the Prime Minister;

g) May delegate in writing to one of the Board of Directors' members to perform the functions and duties of the Chairman of the Board of Directors when the Chairman is absent;

h) Represent the parent company's Board of Directors in dealings with third parties when the parent company represents the state economic group in carrying out common group activities or other activities in the name of the group as agreed among member enterprises.

Article 24. Members and working regime of the Board of Directors of the parent company

1. Members of the Board of Directors must meet the following minimum standards and conditions:

a) Be a Vietnamese citizen residing in Vietnam;

b) Hold a university degree; possess management and business capabilities. The Chairman of the Board of Directors must have at least three years of experience in managing and operating enterprises in the main business sector or related sectors of the group;

c) Be healthy, have good moral character, be honest, incorruptible, understand and comply with the law;

d) Not belong to the category prohibited from assuming managerial positions according to the law.

2. Cases of dismissal, disciplinary action, replacement of members of the Board of Directors; working regime of the Board of Directors; salary, allowances, and bonuses for full-time and part-time members of the Board of Directors shall be regulated as provided in the Articles of Association of the parent company approved by the Prime Minister, the Law on State-Owned Enterprises, this Decree, and relevant laws.

Article 25. Participation in managing other enterprises by the Chairman of the Board of Directors, members of the Board of Directors, and General Director of the parent company

1. The Chairman of the Board of Directors, members of the Board of Directors, and the General Director may only hold managerial positions in other enterprises when introduced as candidates for such positions or appointed as representatives of the parent company for their share capital in those enterprises by the parent company or state organizations with authority; spouses, fathers, mothers, children, brothers, sisters, or half-siblings of the Chairman of the Board of Directors, members of the Board of Directors, and the General Director are not allowed to hold the position of Chief Accountant or cashier in those enterprises.

2. Economic, labor, and civil contracts signed by the parent company with members of the Board of Directors, the General Director, and their spouses, fathers, mothers, children, brothers, sisters, or half-siblings must be reported to the appointing body of the members of the Board of Directors and the General Director. In cases where the appointing body of the members of the Board of Directors and the General Director discovers that the contract has a personal interest motive before it is signed, they have the right to request that the members of the Board of Directors and the General Director not sign the contract. If the contract has already been signed, it will be considered void, and the members of the Board of Directors and the General Director must compensate the parent company for losses and be subject to legal sanctions.

Article 26. Supervisory Board of the parent company

1. The Supervisory Board is established by the Board of Directors, consisting of 03 to 05 members, including the Head of the Supervisory Board who is a member of the Board of Directors assigned by the Board of Directors; other members of the Supervisory Board are selected, appointed, reappointed, or dismissed by the Board of Directors. The Chairman of the Board of Directors and the General Director cannot concurrently serve as the Head of the Supervisory Board.

2. The term of office of members of the Supervisory Board is five years. Members of the Supervisory Board may be reappointed. Members of the Supervisory Board receive salaries, bonuses, or allowances determined by the Board of Directors according to this Decree and laws on wages and remuneration.

3. The Supervisory Board operates under regulations approved by the Board of Directors, with the following duties, powers, and responsibilities:

a) Checking and supervising the legality and honesty in management and operation, in accounting records, financial reports, and compliance with the Articles of Association of the parent company, resolutions, decisions of the Board of Directors, and decisions of the Chairman of the Board of Directors concerning the parent company and its subsidiaries; being responsible to the Board of Directors for performing the assigned rights and duties;

b) Implementing tasks assigned by the Board of Directors, reporting to the Board of Directors monthly, quarterly, annually, and ad hoc on the results of their checks and supervision; promptly identifying and reporting to the Board of Directors about abnormal activities, contrary to corporate governance regulations, or signs of legal violations in the parent company and its wholly-owned subsidiaries;

c) Not disclosing the results of checks and supervision without permission from the Board of Directors; being responsible to the Board of Directors and the law for intentional acts of overlooking or covering up violations;

4. Members of the Supervisory Board must meet the following criteria and conditions:

a) Resident in Vietnam;

b) Possess good health, moral integrity, honesty, and a sense of law-abiding;

c) Hold a university degree or higher and be an expert in accounting, auditing, economics, finance, or related fields to the parent company's business sectors; understand the law; have at least five years of work experience in these fields; have no criminal record related to economic offenses;

d) Not have spouses, fathers, mothers, children, brothers, sisters, or half-siblings holding positions as members of the Board of Directors, General Director, Chief Accountant, or cashier of the parent company;

đ) Members of the Supervisory Board work on a full-time basis and do not concurrently hold leadership positions within the state apparatus.

5. Operating costs, including salaries, allowances, and working conditions of the Supervisory Board are guaranteed by the parent company.

Article 27. General Director of the Parent Company

1. The General Director is the legal representative of the parent company, except in cases where the Prime Minister decides otherwise upon the proposal of the Board of Directors; manages the daily operations of the parent company according to objectives, plans, and resolutions and decisions of the Board of Directors; is responsible before the Board of Directors and the law for the performance of assigned rights and duties.

2. The General Director is appointed, reappointed, relieved of duty, contracted, and terminated from contract, rewarded, and disciplined after receiving written approval from the Prime Minister. The Charter of the parent company specifies the criteria and conditions for becoming the General Director.

3. The General Director is appointed or contracted for a term of five years. The Board of Directors decides on reappointment or extension of the contract for the General Director after receiving written approval from the Prime Minister.

4. The Board of Directors decides on relieving of duty or termination of contract before the term for the General Director after receiving written approval from the Prime Minister in the following cases:

a) For the parent company to incur losses for two consecutive years or fail to meet the profit rate targets set by the owner for two consecutive years, or be in a state of alternating losses and profits but unable to rectify the situation, except for losses or reductions in the profit rate on state capital investment that have been approved by the competent authority; losses due to planned expansion of production or technological innovation as per resolutions or decisions of the Board of Directors; losses or reductions in the profit rate on state capital investment with objective reasons explained and approved by the competent authority;

b) The parent company enters a state of bankruptcy but does not file for bankruptcy as prescribed by the law on bankruptcy;

c) Failure to complete assigned tasks or targets set by the Board of Directors; repeated and systematic violations of Board of Directors' resolutions and decisions, and internal regulations of the parent company;

d) Lack of honesty in exercising powers or abuse of position and powers for personal gain or for others; providing false financial reports of the parent company;

đ) Being deprived or restricted in civil capacity;

e) Being convicted by a court judgment or decision that has taken legal effect.

5. The General Director shall be replaced in the following cases:

a) Voluntarily resigning and obtaining written approval from the competent authority in accordance with legal procedures;

b) When there is a decision to transfer, retire, or assign another job.

Article 28. Duties and Powers of the General Director of the Parent Company

1. Organizing the development of the parent company's strategic plan; planning the development of projects in the industries and businesses of the parent company and the entire state economic group; long-term plans, annual plans of the parent company, coordination plans for production and business within the group; funding mobilization and utilization schemes; preparing investment projects, allocating resources, preparing organizational management proposals; drafting the Charter, amending the Charter of the parent company, drafting the financial regulations of the parent company, internal management regulations of the parent company; developing human resource development plans; establishing and monitoring the implementation of economic-technical indicators, product quality standards, wage rates, product prices; preparing economic contracts, civil contracts; preparing regular reports, statistical reports, financial reports of the parent company, consolidated financial reports of the group, other project proposals;

2. Submitting to the Board of Directors for the Board of Directors to submit to the Prime Minister or relevant state agency for decision or approval on matters within the owner's rights over the parent company.

3. Submitting to the Board of Directors for consideration and decision on matters within the Board of Directors' jurisdiction.

4. Deciding on issues delegated or authorized by the Board of Directors as stipulated in this Decree.

5. Deciding on investment projects, sale of assets of the parent company; loan, lending, leasing, and other economic contracts; schemes for using funds and assets of the parent company to contribute capital or purchase shares of enterprises at different levels or authorized by the Board of Directors and related laws.

6. Deciding on recruitment, contracting, termination of contracts, appointment, reappointment, relief of duty, rewards, punishments, salary levels, and allowances for positions classified by the Board of Directors.

7. Proposing to the Board of Directors to decide on appointing representatives of the parent company's shareholding in other enterprises.

8. Deciding on assigning tasks to Deputy General Directors.

9. Dispatching employees, officials, workers, and laborers of the parent company, members of the Board of Members, Chairmen, Supervisors of the parent company, General Directors, and Managers of wholly-owned subsidiaries of the parent company, subordinate units abroad for work, study, personal matters; accepting foreign individuals and groups into Vietnam to work with the parent company; authorizing the Chairman of the parent company, General Directors, and Managers of wholly-owned subsidiaries of the parent company, subordinate units to dispatch their employees, officials, workers, and laborers abroad for work, study, personal matters, and accepting foreign individuals and groups into Vietnam to work with their units.

10. Implementing business plans, investment plans, and daily activities; coordination plans for business within the group; auditing, inspection, protection, market development, marketing, and technology activities, and other activities aimed at effectively implementing Board of Directors' and owner's resolutions and decisions; managing the parent company's operations to implement Board of Directors' resolutions and decisions.

11. Signing civil and economic contracts of the parent company. For contracts exceeding the level authorized to the General Director, the General Director can only sign after obtaining a resolution or decision from the Board of Directors.

12. Reporting to the Board of Directors on the results of the parent company's business activities; publicly disclosing financial reports in accordance with the law.

13. Be subject to inspection and supervision by the Board of Directors, the Audit Committee, and state management agencies with authority over the performance of functions and duties as prescribed by law.

14. Carry out monitoring, inspection, and supervision of the activities of subsidiary units as assigned or authorized by the Board of Directors.

Apply necessary measures exceeding their own authority in emergency situations and report immediately to the Board of Directors and state agencies with authority.

16. Other rights and duties as prescribed by law, this Decree, and decisions of the Board of Directors.

Article 29. Relationship between the Board of Directors and the General Director in managing and operating the parent company

1. When implementing resolutions and decisions of the Board of Directors, if issues unfavorable to the parent company are discovered, the General Director must immediately report to the Board of Directors for review and adjustment. The Board of Directors must consider the General Director's proposal. If the Board of Directors does not adjust the resolution or decision, the General Director still has to implement it but retains the right to reserve their opinion and appeal to the Prime Minister.

2. Within fifteen days from the end of each month, quarter, and year, the General Director must submit a written report on the business operation situation and plans for the next period to the Board of Directors.

3. The Chairman of the Board of Directors shall attend or appoint a representative of the Board of Directors to attend regular meetings and preparatory meetings for proposals presented to the Board of Directors chaired by the General Director. The Chairman of the Board of Directors or the representative attending the meeting has the right to express opinions but does not have the authority to conclude the meeting.

Article 30. Obligations and Responsibilities of the Chairman of the Board of Directors, Members of the Board of Directors, and the General Director of the Parent Company

1. The Chairman of the Board of Directors, members of the Board of Directors, and the General Director have the obligation:

a) To faithfully and responsibly perform the powers and duties entrusted for the benefit of the parent company and the State;

b) Not to abuse positions and authorities to use the capital and assets of the parent company for personal gain or that of others; not to transfer the assets of the parent company to others; not to disclose the secrets of the parent company during the time they hold office and for at least three years thereafter, except with the approval of the Board of Directors;

c) When the parent company fails to pay its debts and other financial obligations due, the General Director must report to the Board of Directors to find ways to overcome financial difficulties and inform all creditors of the financial situation. In such cases, the Board of Directors and the General Director may not decide to increase salaries or distribute profits as bonuses to managers and related employees;

d) When the parent company fails to pay its debts and other financial obligations due without complying with the provisions of point c of this clause, they shall be personally liable for damages caused to creditors;

đ) In case the Chairman of the Board of Directors, members of the Board of Directors, or the General Director violate the Articles of Association of the parent company, make decisions beyond their authority, abuse positions and authorities causing damage to the parent company and the State, they must compensate for losses according to the law and the Articles of Association of the parent company;

e) Not to allow spouses, parents, children, brothers, sisters, or full siblings to hold the position of Chief Accountant or cashier of the parent company.

2. Members of the Board of Directors must jointly bear responsibility before the Prime Minister and the law for the decisions of the Board of Directors, the results, and effectiveness of the parent company's operations.

3. The General Director is responsible before the Board of Directors and the law for daily management of the parent company's operations and for performing the rights and duties entrusted.

4. When violating any of the following circumstances but not to the extent of criminal prosecution, the Chairman of the Board of Directors, members of the Board of Directors, and the General Director shall not be rewarded, shall not receive salary increases, and shall be disciplined according to the degree of violation:

a) Causing the parent company to incur losses;

b) Causing the loss of state capital;

c) Deciding on ineffective investment projects, unable to recover invested capital, or repay debts;

d) Failing to ensure wages and other benefits for employees of the parent company as prescribed by labor laws;

đ) Causing violations in managing capital and assets, accounting systems, auditing systems, and other systems prescribed by the State.

5. The Chairman of the Board of Directors who is negligent, fails to properly perform their functions, duties, and authorities leading to violations under paragraph 4 of this Article shall be relieved of their position, depending on the degree of violation and the consequences, and must compensate for losses according to the law.

6. In case the parent company falls into the situation specified in point a of paragraph 4 of Article 27 of this Decree, depending on the degree of violation and consequences, the Chairman of the Board of Directors and the General Director may face salary reductions or dismissal, and must also compensate for losses according to the law.

7. In case the parent company faces bankruptcy and the General Director does not file for bankruptcy, they shall be relieved of their position or terminated from their contract and held responsible according to the law; if the General Director does not file for bankruptcy and the Board of Directors does not require the General Director to file for bankruptcy, the Chairman of the Board of Directors and members of the Board of Directors shall be relieved of their positions.

8. In case the parent company is organized for restructuring, dissolution, or ownership conversion but does not proceed with the relevant procedures, the Chairman of the Board of Directors, members of the Board of Directors, and the General Director shall be relieved of their positions.

9. Members of the Board of Directors and General Director shall receive annual salaries and bonuses corresponding to the results and effectiveness of the business operations of the enterprise for the year and the results of management activities during their entire term of appointment; they may be advanced 70% of their total annual salary, with the remaining 30% only settled and paid out after the end of their term. In cases where the ranking results of the enterprise and the evaluation results of the management and operation of the Board of Directors and General Director do not meet the requirements stipulated in point a, Clause 2, Article 43 of this Decree, members of the Board of Directors and the General Director of the parent company shall not settle the remaining 30% of their annual salary and shall not enjoy the bonus regime of that year.

Article 31. Deputy General Directors, supporting staff, and participation of workers in the management and operation of the parent company

1. The parent company shall have Deputy General Directors and Chief Accountants, who shall be appointed, reappointed, relieved of duty, dismissed, rewarded, and disciplined upon the proposal of the General Director by the Board of Directors.

2. Deputy General Directors assist the General Director in management; carry out tasks and powers assigned by the General Director; bear responsibility before the General Director and the law for the tasks and powers entrusted.

3. Deputy General Directors shall be appointed for a maximum term of five years and may be reappointed. The salary, responsibility allowances, and bonuses of Deputy General Directors and Chief Accountants shall be decided by the Board of Directors based on the proposal of the General Director and in accordance with Clause 9, Article 30 of this Decree.

4. Supporting staff includes the Office and specialized departments, which have the function of advising and assisting the Board of Directors and General Director in managing and operating the parent company and the economic group. The organizational structure, functions, tasks, and powers of the supporting staff shall be decided by the General Director after being approved by the Board of Directors.

5. Workers participate in the management of the parent company through forms and organizations prescribed by law. The charter of the parent company specifies the details of worker participation in management according to the characteristics of each parent company.

SECTION III. RELATIONSHIP BETWEEN THE PARENT COMPANY AND ENTERPRISES PARTICIPATING IN THE ECONOMIC GROUP

Article 32. General Coordination Relationships within the State Economic Group

The parent company, member enterprises, associated enterprises, voluntarily linked enterprises, and other enterprises participating in the group shall implement general coordination relationships as follows:

1. Establishing a common operational regulation based on the agreement between the parent company and participating enterprises.

2. Based on the rights and responsibilities prescribed by law, the parent company acts as the central entity to implement part or all of the following coordinated activity contents among enterprises within the group:

a) Coordination in planning work and the execution of coordinated business plans;

b) Orientation for the division of business fields and industries of production and business of member enterprises of the group;

c) Organization of financial, accounting, and statistical work;

d) Formation, management, and utilization of centralized funds of the group;

đ) Management and use of land and mineral resources;

e) Labor affairs, wages, health care, training, and human resource development;

g) Occupational safety, disaster prevention, and environmental protection;

h) Scientific and technological application work;

i) Naming units within the group; using the name and brand of the group;

k) Implementation of administrative work and external relations of the group;

l) Management of commendation and reward work, culture, sports, and social activities;

m) Other contents agreed upon by member enterprises of the group.

Article 33. Relationship between the parent company and the second-tier enterprise owned 100% by the parent company

1. The Board of Directors of the parent company shall exercise the rights and obligations of the owner of the parent company towards the second-tier enterprise owned 100% by the parent company.

2. In relation to the second-tier enterprise owned 100% by the parent company, the General Director of the company shall be responsible for:

a) Receiving, examining, and appraising the reports submitted by the second-tier enterprise to the parent company for the Board of Directors to consider, approve, or decide;

b) Organizing the implementation of resolutions and decisions of the Board of Directors concerning the second-tier enterprise;

c) Monitoring, urging, and supervising the implementation of the coordinated production and business plan at the second-tier enterprise.

3. The second-tier enterprise owned 100% by the parent company:

a) Shall be assigned by the parent company to implement production and business contracts based on economic contracts; provide information and enjoy services and benefits from the common activities of the economic group according to this Decree, agreements with member enterprises of the group, and relevant laws;

b) Shall fulfill the general agreements of the economic group; contractual commitments with the parent company and member enterprises of the economic group; implement lawful decisions within the scope of the parent company's ownership rights over the enterprise; participate in the coordinated business plan with the parent company and other member enterprises of the group.

Article 34. Relationship between the parent company and the second-tier enterprise where the parent company holds controlling shares or capital contribution

1. The parent company shall have the rights and obligations of shareholders, contributing members, and joint venture parties of the second-tier enterprise according to relevant laws. The Board of Directors of the parent company directly exercises the following rights and obligations:

a) Exercise the rights and obligations of shareholders, contributing members, and joint venture parties through the representative managing the parent company’s shares or capital contribution at the enterprise in accordance with the law and the enterprise’s Articles of Association;

b) Appoint, change, dismiss, reward, discipline, determine allowances and benefits for the representative managing the parent company’s shares or capital contribution at the enterprise;

c) Require the representative managing the parent company’s shares or capital contribution to report periodically or unexpectedly on the financial situation, business results, and other contents of the enterprise;

d) Assign tasks and require the representative managing the parent company’s shares or capital contribution at the enterprise to seek opinions on important issues before voting at the enterprise; report on the use of controlling shareholder rights to serve the development orientation and objectives of the parent company and the state economic group;

đ) Receive dividends and bear risks from its shareholding or capital contribution in the enterprise;

e) Supervise and inspect the use of the contributed capital in the enterprise;

g) Be responsible for the effectiveness, preservation, and development of the contributed capital in the enterprise.

2. In relation to the second-tier enterprise where the parent company holds controlling shares or capital contribution, the General Director of the parent company shall be responsible for:

a) Receiving, examining, and appraising the reports submitted by the enterprise to the parent company for the Board of Directors to consider, approve, or decide;

b) Organizing the implementation of resolutions and decisions of the Board of Directors concerning the enterprise;

c) Monitoring, urging, and supervising the implementation of the coordinated production and business plan at the enterprise.

3. The second-tier enterprise where the parent company holds controlling shares or capital contribution shall have the rights and obligations as prescribed by law and the following provisions:

a) Shall have the right to participate in the coordinated business plan based on economic contracts with the parent company and other member enterprises of the group; be assigned by the parent company to implement production and business contracts based on economic contracts with the parent company; receive information and enjoy services and benefits from the common activities of the economic group according to this Decree, agreements with member enterprises of the group, and relevant laws;

b) Shall fulfill the general agreements of the economic group, contractual commitments with the parent company and member enterprises of the economic group; implement lawful decisions of the parent company in exercising controlling rights over the enterprise.

Article 35. Relationship between parent company and associated company

1. The parent company shall exercise its rights and obligations towards the associated enterprise in accordance with the provisions of the law, the Articles of Association of the associated enterprise, and the association agreement.

2. The parent company shall relate to the associated company through contracts concerning trademarks, markets, technology, research, training, and human resource development, and other agreements.

Article 36. Relationship between parent company and voluntarily participating associated company

1. Enterprises of all economic sectors may voluntarily participate in the corporate group association in accordance with the provisions of the law. A voluntarily associated company without shares or capital contribution from the parent company shall be established, organized, and operate according to the relevant legal regulations corresponding to the legal form of the company.

2. A voluntarily associated company shall be bound by the rights and obligations with the parent company and other member enterprises of the corporate group according to the association agreement.

3. The parent company shall relate to the voluntarily participating associated company through contracts concerning trademarks, markets, technology, research, training, and human resource development, and other agreements.

4. The parent company shall decide on appointing representatives to exercise the rights and obligations of the parent company towards the voluntarily participating associated company.

Article 37. Subordinate units of the parent company

Subordinate units of the parent company shall implement the hierarchical system of business operations, accounting, organization, and personnel according to the Regulations on the operation of dependent accounting units and public service units established by the General Director of the parent company and submitted for approval by the Board of Directors. The parent company shall be responsible for financial obligations arising from the commitments of dependent accounting units and public service units.

Chapter 4.

MANAGEMENT AND SUPERVISION OF STATE ECONOMIC GROUPS

Article 38. Rights and obligations of state owner towards the parent company

1. The rights of the state owner towards the parent company include:

a) Deciding on the establishment, organizational structure, management mechanism, restructuring, dissolution, and ownership conversion of the company;

b) Deciding on the objectives, strategy, long-term plans, and business sectors and industries of the company;

c) Approving the Articles of Association and approving amendments and supplements to the Articles of Association of the company;

d) Deciding on investment to form the registered capital and adjust the registered capital of the company;

đ) Deciding on investment, capital contribution investment, joint ventures, and associations within the scope of authority; approving the policy of borrowing, lending, leasing, and subleasing of the company;

e) Deciding on the financial regime of the company, income distribution, reserve fund establishment and utilization;

g) Deciding on the appointment, reappointment, dismissal, removal, commendation, and disciplinary action against the Chairman of the Board of Directors, Board of Directors members, and General Director;

h) Specifying the wage system, wage allowances, bonuses, and determining the wage levels and allowances for the Chairman of the Board of Directors and Board of Directors members;

i) Specifying the ordering system, bidding or assignment of tasks, selling prices, and price adjustments for implementing production and supply of public goods and services;

k) Organizing inspections and supervision of the implementation of objectives and tasks, compliance with decisions of the owner, and evaluating the operational effectiveness of the parent company.

2. The state owner has the following obligations towards the parent company:

a) Providing sufficient registered capital for the parent company;

b) Fulfilling the provisions related to the owner in the Articles of Association of the parent company;

c) Being liable for the debts and other property obligations of the parent company within the scope of the parent company's registered capital;

d) Bearing responsibility under the law when deciding on investment projects; approving policies on buying, selling, borrowing, lending, leasing, and subleasing within the scope of authority;

đ) Ensuring the autonomy in business operations and legal responsibility of the parent company; not interfering illegally in the business operations of the parent company.

e) Fulfill other obligations as prescribed by law.

Article 39. Owner and State Owner's Representative for State Economic Groups

1. The Government shall uniformly exercise the rights and obligations of the State owner towards the parent company.

2. The person directly representing the State owner at the parent company of a state economic group is the individual appointed by the Prime Minister to be a member of the Board of Directors of the parent company.

Article 40. Allocation and Delegation of the Rights of the State Owner towards the Parent Company of State Economic Groups

1. The Government:

a) Uniformly exercises the rights of the State owner towards the parent company and the State capital in state economic groups.

b) Issues regulations on the establishment, organization, operation, and management of state economic groups; issues management mechanisms and oversight for state economic groups.

c) Monitors and evaluates the implementation of the rights and obligations of the State owner towards the parent company and the State investment capital in state economic groups that have been delegated or assigned to agencies as stipulated in this Decree.

d) Requests agencies, organizations, and individuals who have been delegated or assigned to implement the rights and obligations of the State owner towards the parent company and the State investment capital in state economic groups to report on the implementation of their delegated or assigned tasks; on the operational status of state economic groups.

2. The Prime Minister:

a) Decides on the establishment of the parent company according to Article 11 of this Decree; decides on restructuring, dissolution, and ownership transformation of the parent company based on proposals from the industry management ministry and opinions from the Ministry of Finance and the Ministry of Planning and Investment;

b) Approves the objectives, strategies, long-term plans, and business sectors of the parent company based on proposals from the Board of Directors and opinions from the industry management ministry, the Ministry of Finance, and the Ministry of Planning and Investment;

c) Approves the Articles of Association, approves amendments and supplements to the Articles of Association of the parent company based on proposals from the Board of Directors and opinions from the industry management ministry, the Ministry of Finance, and the Ministry of Planning and Investment;

d) Decides on investments to form the registered capital and adjust the registered capital during operations for the parent company based on proposals from the Board of Directors and opinions from the industry management ministry, the Ministry of Finance, and the Ministry of Planning and Investment;

đ) Decides on investment projects of the parent company, investment projects outside the parent company within the authority of the Prime Minister as prescribed by laws on investment and this Decree;

e) Decides on the appointment, reappointment, dismissal, removal, commendation, and disciplinary action for the Chairman and members of the Board of Directors of the parent company based on proposals from the industry management ministry and assessments from the Ministry of Home Affairs;

g) Approves the Board of Directors to decide on the appointment, reappointment, dismissal, signing contracts, commendation, and disciplinary action for the General Director based on proposals from the Board of Directors and assessments from the industry management ministry;

3. Industry Management Ministry:

a) Proposes to the Prime Minister decisions on establishing, restructuring, dissolving, and transforming ownership of the parent company; appointing, reappointing, dismissing, removing, commending, and disciplining the Chairman and members of the Board of Directors of the parent company;

b) Provides opinions for the Prime Minister to approve the Articles of Association of the parent company; approve amendments and supplements to the Articles of Association of the parent company; decide on objectives, strategies, long-term plans, business sectors, registered capital, and adjustments to the registered capital; approve the Board of Directors to appoint, reappoint, dismiss, sign contracts, commend, and discipline the General Director;

c) Directs the implementation and monitors the execution of the objectives, strategies, and long-term plans of the parent company;

d) Is responsible for the procedures, formalities, standards, qualities, and capabilities of Board of Directors members and General Directors of the parent company proposed to the Prime Minister for appointment.

4. The Ministry of Finance:

a) Provides opinions for the Prime Minister to consider and decide on establishing, restructuring, dissolving, and transforming ownership of the parent company; approving the Articles of Association of the parent company; approving amendments and supplements to the Articles of Association of the parent company; investing capital to form the registered capital and adjust the registered capital during operations for the parent company;

b) Ensures sufficient registered capital investment for the parent company according to the Prime Minister's decision;

c) Approves the Financial Management Regulations of the parent company based on proposals from the parent company's Board of Directors, except where the Government has other provisions.

5. The Ministry of Planning and Investment provides opinions for the Prime Minister to consider and decide on establishing, restructuring, dissolving, and transforming ownership of the parent company; objectives, strategies, long-term plans, and business sectors of the parent company; approving the Articles of Association of the parent company; approving amendments and supplements to the Articles of Association of the parent company; investing capital to form the registered capital and adjust the registered capital during operations for the parent company.

6. The Ministry of Home Affairs:

a) Reviews the implementation of procedures, formalities, standards, and conditions for the appointment, reappointment, dismissal, removal, commendation, and disciplinary action for the Chairman and members of the Board of Directors proposed by the industry management ministry to the Prime Minister.

b) Guides the procedures and formalities for the appointment, reappointment, dismissal, removal, commendation, and disciplinary action for the Chairman of the Board of Directors, members of the Board of Directors, General Director or Director, Deputy General Director or Deputy Director, Chief Planner, and other key managerial positions in the parent company.

7. The Board of Directors of the parent company, authorized by the Prime Minister, implements the rights and obligations of the State owner towards the parent company and the State investment capital in state economic groups, except for the rights and obligations specified in Clauses 1 through 6 of this Article.

Article 41. Rights and obligations of the direct representative of state ownership at the parent company

1. Members of the Board of Directors shall perform the rights and obligations stipulated in Articles 21 and 22, Clause 7 of Article 40 of this Decree and the following rights and obligations:

a) Monitor, supervise, and report periodically or upon request of the Government, Prime Minister, and agencies authorized to exercise the rights of state ownership regarding the business operation situation, financial status, and business results of the parent company and its subsidiaries as prescribed by law and the Company's Charter;

b) Coordinate, harmonize, or guide subsidiaries through activities specified in Clause 3 of Article 13 of this Decree; propose solutions to adjust the parent company and its subsidiaries to comply with assigned objectives and directions;

c) Ensure the interests of the State and the efficiency of the state-owned economic group's operations;

d) Perform other rights and obligations as prescribed by law, the parent company's Charter; tasks assigned by the Prime Minister or persons authorized by the Prime Minister;

đ) Be responsible before the Government and the Prime Minister for the tasks assigned. In case of negligence, abuse of duties causing damage to the State, they must bear responsibility and compensate material losses according to the provisions of law;

2. The Board of Directors of the parent company has the responsibility to report annually and provide ad hoc reports upon request of the Government and the Prime Minister on the following contents:

a) The situation and results of guiding the economic group to implement the objectives and tasks assigned by the state owner, including economic goals in the main business sectors;

b) The list and structure of investment in the main business sectors and non-related sectors;

c) The situation of raising capital for investment in the financial, banking, real estate, and securities sectors;

d) Forms and levels of association between enterprises within the economic group;

đ) Organizational work and personnel of the parent company; business sector workforce, related sectors, and non-related sectors;

e) Provisions of the parent company regarding issues that must be approved by the parent company before the authorized representative at subsidiaries makes decisions or participates in decision-making at subsidiaries;

3. Members of the Board of Directors of the parent company must declare the following related interests with the parent company and subsidiaries:

a) Name, headquarters address, business sector, business registration certificate number and date of issuance, place of business registration of the enterprise in which they hold shares or equity; the ratio and time of holding such shares or equity;

b) Name, headquarters address, business sector, business registration certificate number and date of issuance, place of business registration of the enterprise in which their related parties jointly hold or individually hold more than 35% of the charter capital;

Article 42. Management, supervision, and evaluation of state ownership over state-owned economic groups

1. Contents of management and supervision of state ownership over state-owned economic groups through monitoring the parent company include:

a) Management and supervision of organizational work and personnel, including: organization, establishment, joining, restructuring, dissolution of the economic group; changes in ownership structure of subsidiaries leading to becoming enterprises with less than controlling capital of the parent company; implementation of the parent company's Charter; appointment, reappointment, dismissal, salary system, performance, and results of the parent company's Board of Directors' activities;

b) Management and supervision of business activities, including: economic goals, direction, and strategy of the economic group; investment plans, financial plans of the parent company; investment portfolio, main business sectors, and non-related business sectors; investment in sectors, industries, areas, projects with risk; public service tasks;

c) Financial management: preservation and development of capital; financial activity situation and results; return on state capital; investment and business efficiency; wage costs; borrowing, debt, and debt repayment capacity; registered capital, increase or decrease in registered capital, changes in registered capital structure; investment projects exceeding the level delegated to the parent company;

2. Allocation of responsibilities for implementing the supervision content stipulated in Clause 1 of this Article is as follows:

a) The Ministry of Finance monitors and evaluates the financial activities, results, and business efficiency of the parent company and the entire economic group; monitors the issuance of shares, increase in registered capital of the parent company and subsidiaries; wage costs; monitors borrowing for investment in the financial, banking, real estate, and securities sectors; monitors the transfer of capital, investment, and resources within the group and between inside and outside the economic group; tracks the consolidated financial statements of the economic group;

b) The Ministry of Labor, Invalids, and Social Affairs monitors state-owned economic groups to implement regulations on average wage growth being lower than labor productivity growth;

c) Sector management ministries are responsible for monitoring the investment portfolio, main business sectors, and related sectors; evaluate the main industry structure and related sectors; track leadership and management personnel at the parent company; assess the ability to meet requirements for leadership and management personnel in the main business sectors and related sectors;

d) The Ministry of Planning and Investment shall monitor and oversee the implementation of the proposal to form state business groups; supervise the parent company in establishing new enterprises and participating in capital contributions to other enterprises within the scope of business, industry, geographical area, and projects with potential risks; monitor and evaluate the process of performing the state ownership function for the parent company in state economic groups; assess the results of implementing the proposal; analyze the advantages and risks of developing economic groups; monitor and evaluate the implementation of development strategies by state economic groups.

đ) Other monitoring activities not specified in points a, b, c, and d of this clause shall be carried out by the Government, the Prime Minister, or agencies and organizations authorized by the Government or the Prime Minister.

3. Ministries, agencies, and organizations specified in Clause 2 of this Article shall report periodically each year on the current status and results of monitoring and evaluation to the Prime Minister. The Ministry of Finance shall be responsible for compiling reports on monitoring and evaluation from ministries, agencies, and organizations authorized to do so; report to the Prime Minister and the Government.

Article 43. Management and Supervision Methods for State Economic Groups

1. Management and supervision of state economic groups shall be implemented through the following methods:

a) Through the reporting system of the Board of Directors of the parent company;

b) Through conducting audits at the parent company and member enterprises;

c) Through periodic and ad hoc reporting systems of the parent company;

d) Through inspection, monitoring, and evaluation activities of agencies stipulated in Article 42 of this Decree.

2. Bases for management and supervision of state economic groups:

a) The Government shall issue regulations on management, supervision, and evaluation of state economic groups; specify annual performance indicators and ranking criteria for state economic groups; set performance indicators and evaluation criteria for the activities of the Board of Directors, General Director, Deputy General Directors, and Chief Accountant of the parent company;

b) The results of monitoring and evaluation as specified in point a of this clause shall serve as the basis for determining salaries, bonuses, appointments, reappointments, dismissals, commendations, disciplinary actions, and responsibility handling for the Chairman, members of the Board of Directors, General Director, Deputy General Directors, and Chief Accountant of the parent company.

Chapter 5.

IMPLEMENTING PROVISIONS

Article 44. Effective date of implementation

1. This Decree shall take effect from December 20, 2009.

2. State economic groups established as pilot projects before the effective date of this Decree shall be responsible for reviewing their organizational structure, management, formation methods, development, linkage mechanisms, and other relevant contents according to the provisions of this Decree; report to the Prime Minister and related agencies as stipulated in Article 40 of this Decree;

3. Other state economic groups not subject to the application of this Decree shall be organized and operate in accordance with the Enterprise Law and related laws; may apply relevant provisions of this Decree for organization and operation.

Article 45. Responsibilities for Organizing Implementation and Enforcement

1. The Ministry of Finance shall guide the establishment of risk insurance funds based on market principles for state economic groups operating in key sectors of the economy; stipulate depreciation of fixed assets to ensure consistency and compatibility among member enterprises of state economic groups.

2. The Ministries of Planning and Investment, Finance, Justice, Labor - Invalids and Social Affairs, Home Affairs, and Industry and Trade shall be responsible for guiding the implementation of this Decree.

The Ministry of Planning and Investment shall be responsible for monitoring the enforcement of this Decree.

3. Ministries, ministerial-level agencies, agencies under the Government, and People's Committees at all levels shall perform administrative management functions over state economic groups in areas prescribed by law.

4. Ministers, heads of ministerial-level agencies, heads of agencies under the Government, Chairmen of Provincial People's Committees, Chairmen of Municipal People's Committees directly under the Central Government, Chairmen of the Boards of Directors, and General Directors of state economic groups and state-owned corporations shall be responsible for enforcing this Decree.