Circular No. 156/2019/TT-BQP guiding the transfer of state capital investment at joint-stock companies where the Ministry of National Defense is the representative owner.

CIRCULAR

Guidelines for implementing the transfer of state capital investment in joint-stock companies where the Ministry of National Defense is the representative owner

Decree No. 91/2015/NĐ-CP dated October 13, 2015 of the Government on state capital investment in enterprises and management and use of state capital and assets in enterprises; amended and supplemented by Decree No. 32/2018/NĐ-CP dated March 8, 2018 of the Government

              

Pursuant to the Law on Management and Use of State Capital for Investment in Business Operations dated November 26, 2014;

On the basis of The Minister of National Defense issues this Circular to guide the implementation of the transfer of state capital investment in joint-stock companies where the Ministry of National Defense is the representative owner.;

Based on Decree No. 164/2017/NĐ-CP dated December 30, 2017, of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of National Defense;

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

This Circular guides the implementation of the transfer of state capital investment in joint-stock companies where the Ministry of National Defense is the representative owner.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

Article 1. The representative of state capital investment in joint-stock companies where the Ministry of National Defense is the representative owner.

Article 2. Applicability

Article 2. Joint-stock companies with state capital contribution where the Ministry of National Defense is the representative owner.

Article 3. Agencies, units, organizations, and individuals related to the transfer of state capital investment in joint-stock companies where the Ministry of National Defense is the representative owner.

Article 3. Principles of Capital Transfer

Clause 1. Ensuring according to market principles, transparency, preservation of state capital at the highest level, minimizing losses in investment when transferring capital below par value.

Clause 2. Determining the initial price for the state capital portion before organizing public auction or negotiation shall be carried out through an appraisal organization in accordance with the law on appraisal.

Clause 3. The appraisal must ensure the determination of the actual value of the state capital portion in the enterprise.

Clause 4. Using the initial price to implement the transfer of state capital investment must ensure that the maximum time does not exceed six months from the date the appraisal certificate becomes effective to the final transaction date (for transactions on the securities exchange), or until the winning bid announcement date (for public auction, competitive bidding), or until the date of signing the capital transfer contract (for negotiation). The specific deadlines for implementation are detailed in the Appendix attached to this Circular.

Clause 5. The transfer of state capital related to land use rights must comply with the provisions of the law on land.

AUTHORITY, SCHEME, METHOD OF CAPITAL TRANSFER

Chapter II
Article 4. Authority to decide on the capital transfer scheme

Clause 1. The state capital representative and the main unit under the Ministry of National Defense shall develop a roadmap and capital transfer plan, report to the Minister of National Defense for approval to organize the transfer of state capital investment in joint-stock companies according to the list of state-owned enterprises to be transferred decided by the Prime Minister.

Clause 2. In cases of transferring state capital in joint-stock companies not included in the list of state-owned enterprises to be transferred

If decided by the Prime Minister, the state capital representative and the main unit under the Ministry of National Defense must report to the Ministry of National Defense to submit to the Prime Minister for decision before developing the capital transfer plan. The content of the capital transfer plan shall be implemented in accordance with the provisions of Clause 1, Article 38 of Decree No. 91/2015/NĐ-CP dated October 13, 2015 of the Government on state capital investment in enterprises and management and use of state capital and assets in enterprises (shortened as Decree No. 91/2015/NĐ-CP), Item g, Clause 1, Article 15 of Decree No. 32/2018/NĐ-CP and the following specific defense-related contents:

Point 1. Handling and implementing policies for military personnel, civilian workers, and defense civil servants shall be carried out in accordance with Circular No. 139/2018/TT-BQP dated February 30, 2018 of the Ministry of National Defense guiding the use and implementation of certain policies for personnel working in military enterprises undergoing shareholding reform or dissolution and bankruptcy; joint-stock companies divesting state capital and joint-stock companies with state capital contributions managed by the Ministry of National Defense (shortened as Circular No. 139/2018/TT-BQP).

Point 2. Resolving military license plate vehicles, special military equipment and assets (if any).

Point 3. Transferring Party organizations and mass organizations to localities in accordance with regulations of the Central Committee Secretariat, the Central Military Commission, and the General Political Department.

3. Transfer of Party organizations and mass organizations to localities in accordance with the provisions of the Central Committee Secretariat, the Central Military Commission, and the General Political Department.

The method of transferring state-owned capital shall be carried out in accordance with the provisions of Article 38 of Decree No. 91/2015/ND-CP and Clause 16 of Article 1 of Decree No. 32/2018/ND-CP, including: Stock transactions on stock exchanges, public auctions, competitive bidding, negotiation, and listing.

Chapter III
PROCEDURE FOR TRANSFERRING CAPITAL

Article 7. Establishing, evaluating, and approving plans for handling land

The Ministry of National Defense decides to establish a Working Group to handle defense land at joint-stock companies and implement the following tasks:

1. Developing plans for reorganizing and handling houses and land

a) Guiding units and enterprises to develop plans for reorganizing and handling houses and land as follows: Building a plan and timeline for reviewing defense land; preparing legal documents and files regarding the origin of houses and land; reviewing and proposing plans for reorganizing and handling houses and land to be reported to the General Staff for consideration and approval by the Minister of National Defense;

b) Evaluating plans for reorganizing and handling houses and land of units and enterprises; organizing inspections (if necessary), and proposing:

- Retaining, relocating positions and areas of land necessary for continued use for military and national defense tasks.

- Positions and areas of land no longer needed for military and national defense tasks will proceed with procedures to change land use purposes, transfer land management to the provincial People's Committee, and sell through public auction to generate state budget revenue to ensure certain military and national defense tasks;

c) Summarizing results and reporting to the General Staff for the Minister of National Defense to consider and decide on the contents proposed in the plans for reorganizing and handling houses and land.

2. Preparing and submitting plans for reorganizing and handling houses and land for approval by competent authorities:

a) Preparing reports to send to the Head of the Ministry of National Defense, seeking opinions from localities (provincial People's Committees where enterprises are using land);

b) Compiling locality opinions and reporting to the Head of the Ministry of National Defense, sending plans for reorganizing and handling houses and land to seek opinions from the Ministry of Finance;

c) Completing plans for reorganizing and handling houses and land, reporting to the Head of the Ministry of National Defense for submission to the Prime Minister for consideration and approval, and consolidating them into the overall plans for reorganizing and handling houses and land of the Ministry of National Defense.

3. Implementing plans for reorganizing and handling houses and land

a) Based on the approved plans for reorganizing and handling houses and land by the Prime Minister, the Ministry of National Defense cooperates with the provincial People's Committee to complete procedures for changing land use purposes in accordance with laws on land;

Joint-stock companies carry out procedures to obtain land allocation and lease from competent state agencies in accordance with laws on land;

b) The value created by leased land rights must be included in the enterprise's value.

4. During implementation, joint-stock companies continue to fulfill their obligations and responsibilities towards the Ministry of National Defense regarding land according to the current mechanism until there is a decision to reclaim land by competent state agencies as stipulated in Clause 3 of Article 148 of the Land Law 2013.

Article 8. Issuing decisions on transferring state-owned capital in joint-stock companies

Based on the restructuring, reform, and efficiency improvement schemes of military enterprises approved by the Prime Minister in each period; after joint-stock companies sign land lease contracts with provincial People's Committees in accordance with laws on land, the Minister of National Defense issues decisions on transferring state-owned capital invested in joint-stock companies under the Ministry of National Defense as the representative owner. The Prime Minister shall approve on a period-by-period basis; after the provincial People's Committee signs a land lease contract with the joint-stock company in accordance with the laws on land, the Minister of National Defense shall issue a decision to transfer the State's investment capital in joint-stock companies where the Ministry of National Defense is the representative owner.

Article 9. Selection and signing of appraisal organization and consultancy organization contracts

1. For state capital investment in joint-stock companies undergoing transfer with a value of 10 billion VND or more (calculated based on share par value), the Ministry of National Defense shall select and sign contracts to hire appraisal organizations and consultancy organizations.

2. For state capital investment in joint-stock companies undergoing transfer with a value below 10 billion VND (calculated based on share par value), the Ministry of National Defense authorizes:

a) The Economic Department of the Ministry of National Defense to select and sign contracts to hire appraisal organizations and consultancy organizations for joint-stock companies directly managed by the Ministry of National Defense's representative;

b) The lead units under the Ministry of National Defense to select and sign contracts to hire appraisal organizations and consultancy organizations for joint-stock companies directly managed by the lead unit's state capital representative.

Article 10. Determination of Initial Price

2. In cases where the initial price is lower than the average reference price of 30 consecutive trading days on the securities market prior to the announcement of information on the sale of shares for transferring state capital, the average reference price shall be used as the initial price for transferring state capital when trading through the securities market's trading system and over-the-counter transactions for transferring state capital at listed joint-stock companies.

Article 11. Preparation, Review, and Approval of the Capital Transfer Plan

1. Based on the decision to transfer capital issued by the Ministry of National Defense, the State Capital Representative in joint-stock companies shall cooperate with the joint-stock companies to prepare a capital transfer plan to report to the Minister of National Defense for approval. The capital transfer plan includes the following main contents:

a) Legal basis and purpose of transferring capital;

b) Evaluation of capital investment situation, benefits obtained, and the impact of transferring state capital invested in enterprises;

c) Financial status, business results of enterprises with state capital contributions, market demand for investing capital in enterprises with transferred state capital, expected value to be obtained from transferring capital;

d) Method of transferring capital (in cases of auctioning in lots, specific bases for applying lot auctions must be reported according to regulations);

đ) Estimated costs for hiring valuation consultancy organizations and auctioning shares;

e) Estimated resolution of policies for military personnel, defense civil servants according to Circular No. 139/2018/TT-BQP and other related legal documents;

g) Recovery and resolution of transportation means with military license plates, military equipment (if any);

h) Plan for transferring Party organizations and mass organizations to localities after completing the capital transfer;

i) Estimated time for implementing and completing the capital transfer.

2. Relevant functional agencies of the Ministry of National Defense shall review and report to the Minister of National Defense to decide on approving the capital transfer plan.

Article 12. Selection and signing of contracts with Auction Organizations

1. For state-owned capital investment shares in joint-stock companies undergoing transfer transactions valued at 10 billion VND or more (based on share par value), the Ministry of National Defense shall select and sign contracts to hire Auction Organizations.

2. For state capital investment in joint-stock companies undergoing transfer with a value below 10 billion VND (calculated based on share par value), the Ministry of National Defense authorizes:

a) The Economic Department of the Ministry of National Defense shall select and sign contracts to hire Auction Organizations for joint-stock companies directly managed by the Ministry of National Defense through their representatives.

b) Primary units under the Ministry of National Defense shall select and sign contracts to hire Auction Organizations for joint-stock companies directly managed by these primary units through their representatives.

Article 13. Preparation of auction documents and public announcement of information regarding the transfer of capital

1. The Economic Department of the Ministry of National Defense shall cooperate with Auction Organizations to guide State Capital Representatives in joint-stock companies to prepare auction documents, which include:

a) The decision of the Ministry of National Defense approving the plan for transferring capital;

b) The announcement of information according to the model prescribed in Appendix I issued together with Decree No. 32/2018/NĐ-CP;

c) Documentation proving that the Ministry of National Defense is the lawful owner of the registered shares for sale, based on the number of shares to be sold through the auction;

d) Rules for selling shares through public auction.

2. When transferring capital through the sale of shares on the stock exchange, the Ministry of National Defense shall authorize the Economic Department of the Ministry of National Defense to send a document to the Stock Exchange to announce information about the share trading transaction.

Article 14. Organization of the Transfer of Capital

1. The transfer of state-owned capital in listed joint-stock companies, or those registered for trading on the securities market, shall be conducted through stock trading systems organized by the Stock Exchange.

2. In cases where the transfer of state-owned capital in unlisted joint-stock companies, or listed ones not traded on the stock exchange, shall be carried out in the following order: public auction, competitive bidding, and negotiation (transactions outside the stock exchange). In the case of organizing a public auction, the selection and signing of contracts to hire:

a) The Stock Exchange in cases of selling shares through public auction to transfer state-owned capital valued at 10 billion VND or more (based on share par value);

b) Securities companies in cases of selling shares through public auction to transfer state-owned capital valued below 10 billion VND (based on share par value).

The State Capital Representative shall pay the proceeds from selling state-owned shares and other amounts due as stipulated in Article 39 of Decree No. 91/2015/NĐ-CP, and report the results to the Ministry of National Defense (through the Economic Department of the Ministry of National Defense and the Finance Department of the Ministry of National Defense).

Chapter IV
IMPLEMENTATION

Article 16. Responsibilities of the Economic Department of the Ministry of National Defense

1. To compile and advise the Central Military Commission and the Ministry of National Defense on the implementation of the transfer of state-owned capital in joint-stock companies.

2. To take the lead and coordinate with the Finance Department of the Ministry of National Defense to implement the following tasks:

a) Propose and report to the Minister of National Defense to decide on the selection of organizations for valuation, advisory services, and auctions for joint-stock companies transferring state-owned capital valued at 10 billion VND or more (based on share par value); instruct State Capital Representatives in joint-stock companies to implement according to the contract;

b) Select and sign contracts to hire organizations for valuation, advisory services, and auctions (for joint-stock companies directly managed by the Ministry of National Defense through their representatives) for the transfer of state-owned capital valued below 10 billion VND (based on share par value); instruct State Capital Representatives in joint-stock companies to implement according to the contract;

c) Urge primary units to supervise State Capital Representatives in implementing the capital transfer plan, settle transfer costs, and compile the results of the capital transfer to report to the Minister of National Defense;

d) Coordinate with the Policy Bureau of the Political General Staff, the Cadre Bureau of the Political General Staff, and the Military Affairs Department of the General Staff Headquarters in handling and resolving policies for State Capital Representatives, officers, professional military personnel, workers, and defense civil servants who have not yet completed their financial responsibilities after the transfer of capital.

3. To take the lead and coordinate with relevant agencies to implement the following tasks:

a) Coordinate with members of the working group for handling defense land and related agencies of the Ministry of National Defense to review and assess plans for handling defense land managed and used by joint-stock companies, report to the General Staff Headquarters for approval by the Minister of National Defense, and implement;

b) Coordinate with the Finance Department of the Ministry of National Defense, the Military Affairs Department of the General Staff Headquarters, the Cadre Bureau of the Political General Staff, and the Legal Affairs Department of the Ministry of National Defense to assess and report to the Minister of National Defense to approve the plan for transferring capital.

Article 17. Responsibilities of Relevant Authorities

1. Department of Finance/Military Ministry

a) Take the lead and coordinate with competent agencies to review the valuation results of the consulting valuation organization;

b) Coordinate with the Department of Economy/Military Ministry to implement the contents stipulated in Clause 2 and Clause 3 of Article 16 of this Circular;

c) Direct the State Capital Representative to pay the proceeds from selling state shares and other payments as prescribed by the State and the Military Ministry.

2. Department of Planning and Investment/Military Ministry

a) Coordinate with the Department of Economy/Military Ministry to review the capital transfer plan;

b) Participate in supervising the capital transfer according to the approved plan.

3. Office of the Military Ministry shall be responsible for reviewing the procedures, formalities, and files before submitting them to the Minister of Defense for consideration and issuance of documents on capital transfer in accordance with the Working Regulations of the Military Ministry. Direct the Military Audit Office to audit the valuation results of the consulting valuation organization (when requested by the Military Ministry).

4. Department of Forces/General Staff

a) Take the lead in reviewing, assessing, and reporting to the authority with jurisdiction to resolve the number of military personnel under the management of the forces; decide to remove from the first-class military equipment establishment (if any) at the joint-stock company after transferring all state capital;

b) Coordinate with the Department of Economy/Military Ministry to review the capital transfer plan.

5. Operations Department/General Staff shall coordinate with the Department of Economy/Military Ministry to review and assess the plan for handling defense land managed and used by the joint-stock company, report to the Minister of Defense for approval and implementation.

6. Cadre Department/Political General Department

a) Take the lead in reviewing, assessing, and reporting to the authority with jurisdiction to resolve the number of military personnel under cadre management at the joint-stock company after transferring all state capital;

b) Coordinate with the Department of Economy/Military Ministry to review the contents related to the management and use of military personnel in the capital transfer plan.

7. Policy Department/Political General Department

a) Take the lead and coordinate with relevant agencies to review the plan for resolving policies and benefits for officers, professional soldiers, and defense civil servants in the capital transfer plan; resolve any issues arising during the implementation of policies and benefits;

b) Coordinate with the Department of Economy/Military Ministry to review the capital transfer plan.

8. Organization Department/Political General Department shall guide the Party Committee of the main unit to transfer Party organizations and collective Party activities for Party members at the joint-stock company to their localities after transferring all state capital in accordance with regulations and guidelines of the Politburo, Central Military Commission, and Political General Department.

9. Barracks Department/Logistics General Department shall perform the function of the Secretariat of Directive Council 167, consolidate the overall plan for restructuring and handling real estate at joint-stock companies, report as required (after the General Staff reports to the Military Ministry for approval of handling as stipulated in Article 7 of this Circular).

10. Technical General Department shall organize the recovery of military vehicle license plates upon the decision of the authority with jurisdiction to remove from the military equipment establishment.

11. Legal Affairs Department of the Military Ministry

a) Coordinate with the Department of Economy/Military Ministry to review the plan for transferring state investment capital at joint-stock companies where the Military Ministry is the representative owner and the plan for handling land at joint-stock companies;

b) Review and provide comments on draft documents of the Military Ministry regarding the transfer of state investment capital at joint-stock companies where the Military Ministry is the representative owner of the state capital to ensure compliance with legal provisions;

c) Supervise the compliance with laws in the transfer of state investment capital at joint-stock companies where the Military Ministry is the representative owner.

12. Social Insurance of the Military Ministry shall cooperate with relevant agencies to implement social insurance and health insurance policies for officers, professional soldiers, and defense civil servants after the joint-stock company completes the capital transfer.

Article 18. Responsibilities of the main unit under the Ministry of National Defense assigned to manage State Capital Representatives at Joint Stock Companies

1. Review land disposal plans of joint stock companies, report to the General Staff for submission to the Minister of National Defense (through the Economic Department of the Ministry of National Defense).

2. Select and sign contracts for leasing: Appraisal organizations, consulting organizations, auction organizations (for joint stock companies managed by the main unit with State Capital Representatives) to implement the transfer of State capital with a value below VND 10 billion (based on share par value); instruct State Capital Representatives at joint stock companies to implement according to the contract.

3. Review plans for transferring State capital, report to the Minister of National Defense (through the Economic Department of the Ministry of National Defense).

4. Examine and report to the Minister of National Defense to decide on the settlement of policies for military personnel at joint stock companies that have fully transferred State capital.

5. Urge State Capital Representatives to implement the transfer of State capital according to schedule and in accordance with legal regulations.

6. Report results of transferring State capital to the Ministry of National Defense (simultaneously send to the Economic Department of the Ministry of National Defense and the Finance Department of the Ministry of National Defense).

Article 19. Responsibilities of State Capital Representatives at joint stock companies

1. In accordance with directives from competent agencies of the Ministry of National Defense, cooperate with the Board of Directors and Management Board of joint stock companies to implement the transfer of State capital according to guidelines in this Circular, national regulations, and those of the Ministry of National Defense.

2. Be responsible for developing plans for handling real estate; plans for transferring State capital, and implement them upon approval.

3. Be responsible for the accuracy of financial reports, asset inventory records, and other documents related to the transfer of State capital at joint stock companies.

5. After completion, report the results of transferring State capital to the main unit.

6. For joint stock companies directly managed by the Ministry of National Defense through State Capital Representatives, State Capital Representatives must submit reports to the Ministry of National Defense (simultaneously send to the Economic Department of the Ministry of National Defense and the Finance Department of the Ministry of National Defense).

Article 20. Effective Date

This Circular takes effect from December 1, 2019, abolishing all guiding documents of the Ministry of National Defense regarding the transfer of State capital invested in joint stock companies where the Ministry of National Defense is the representative owner, which contradict this Circular.

Article 21. Responsibility for Implementation

Heads of main units under the Ministry of National Defense, State Capital Representatives at joint stock companies, relevant organizations and individuals are responsible for implementing this Circular./.