Decision No. 2592/2005/QD-BTC On the issuance of the procedure for combining the equitization of state-owned enterprises with the listing/trading registration of shares at securities trading centers

DECISION

Regarding the issuance of the procedure for combining the equitization of state-owned enterprises with the listing/registration of shares for trading at securities exchanges

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 THE MINISTER OF FINANCE

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government on the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 187/2004/NĐ-CP dated November 16, 2004 of the Government on the conversion of state-owned companies into joint-stock companies;

Pursuant to Decree No. 144/2003/NĐ-CP dated November 28, 2003 of the Government on securities and the securities market;

Pursuant to Decision No. 155/2004/QĐ-TTg dated August 24, 2004 of the Prime Minister on criteria and classification lists for state-owned companies and independent accounting subsidiaries under state-owned corporations;

Pursuant to Decision No. 528/2005/QĐ-TTg dated June 14, 2005 of the Prime Minister approving the list of joint-stock companies to be listed for sale of initial public offerings, listing, and registration for trading at Vietnamese securities exchanges;

In accordance with the proposal of the Chairman of the State Securities Commission, the Director of the Corporate Finance Department,

DECIDES:

Article 1. Issued together with this Decision:

1. The procedure for combining the equitization of state-owned enterprises with the listing/registration of shares for trading at securities exchanges;

2. The procedure for combining the sale of state-owned shares at already equitized enterprises with the listing/registration of shares for trading at securities exchanges.

Article 2. This Decision takes effect from the date of signature.

Article 3. Ministers of ministries, heads of ministerial-level agencies, heads of government agencies, Chairmen of People's Committees of provinces and centrally governed cities, Chairmen of Boards of Directors, General Managers (Directors) of state-owned enterprises undergoing equitization, and related organizations and individuals are responsible for implementing this Decision./.

PROCEDURE

FOR COMBINING THE EQUITIZATION OF STATE-OWNED ENTERPRISES WITH THE LISTING / REGISTRATION OF SHARES FOR TRADING AT SECURITIES EXCHANGES
(Issued together with Decision No. 2592 dated August 4, 2005 of the Minister of Finance)

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 Step 1. Issuing a decision on the equitization of state-owned enterprises (SOEs) linked to listing / registration for trading at securities exchanges

The competent authority deciding on equitization selects SOEs that meet the conditions for listing at the Ho Chi Minh City Stock Exchange (HCMSE) or the conditions for trading at the Hanoi Stock Exchange (HNSE), issues a decision to implement equitization while clearly stating the equitization linked to listing at the HCMSE or registration for share trading at the HNSE.

Step 2. Preparing documentation and organizing the valuation of the enterprise

- For SOEs undergoing equitization combined with listing who use consulting organizations during the transition process, the consulting contract must require the consulting organization to assist the enterprise in preparing listing documentation. Enterprises not using consulting organizations during the transition process must sign a listing securities consulting contract with a securities company according to Point 2.5 of Circular No. 59/2004/TT-BTC dated June 18, 2004 of the Ministry of Finance, guiding the listing of shares and bonds on centralized securities markets.

- After receiving the enterprise value determination decision from the competent authority, the enterprise applying for listing prepares listing documentation according to Circular No. 59/2004/TT-BTC dated June 18, 2004 of the Ministry of Finance; enterprises registering for trading at the HNSE prepare documentation according to Decision No. 244/QĐ-BTC dated January 20, 2005 of the Ministry of Finance on the temporary regulations for organizing trading at the HNSE; these enterprises must prepare a prospectus and simultaneously prepare plans for establishing information disclosure systems to meet the regular information disclosure obligations of listed/companies registered for trading.

- Companies applying for listing need to draft the Articles of Organization and Operation of the Joint-Stock Company according to the model Articles issued by Decision No. 07/2002/QĐ-VPCP dated November 19, 2002 of the Government Office;

Step 3. Developing and implementing the equitization plan

- When drafting the equitization plan for SOEs, for companies planning to list immediately after equitization, it is necessary to forecast the proportion of shares sold to the public in line with listing standards (at least 50 shareholders outside the company holding more than 20% of the freely tradable shares of the company. For companies with capital of 100 billion dong or more, this ratio is 15%). For companies planning to trade at the HNSE, there must be at least 50 shareholders holding shares;

- Companies applying for listing send the stock exchange listing application package to the Ministry of Finance (State Securities Commission) including documents such as: the equitization decision linked to listing by the competent authority, the prospectus, financial statements of the year immediately preceding the year of equitization audited or the enterprise value determination decision by the competent authority (if an auditing organization participates in valuing the enterprise), the listing consulting contract. Missing documents can be supplemented after the completion of equitization.

- Companies registering for trading at the HNSE send the trading registration package to the HNSE, including documents such as: the equitization decision linked to trading at the stock exchange by the competent authority, the prospectus, audited financial statements of the year immediately preceding the year of equitization or the enterprise value determination decision by the competent authority (if an auditing organization participates in valuing the enterprise).

- For member enterprises under dependent accounting of corporations, when registering transactions at the Hanoi Stock Exchange in connection with shareholding reform, they are exempted from the condition that "the business activities of the year immediately preceding the year of registration must be profitable."

- Before implementing the plan to sell shares, the enterprise must publish information on mass media and at designated locations, including the prospectus, share issuance plan, and related documents for investors to base their investment decisions on. The announcement of share sales must clearly state that the shares will be listed on the Ho Chi Minh City Stock Exchange or registered for trading at the Hanoi Stock Exchange; Shareholders who register to purchase shares are deemed to have agreed to the listing or registration of shares on these stock exchanges.

Step 4. Complete the procedures for converting the enterprise and listing/trading.

- After completing the distribution of shares, the enterprise conducts a shareholders' meeting to approve the Articles of Association of the joint-stock company, elect the Board of Directors and management staff; Register for business operations;

- Enterprises applying for listing submit additional missing documents in the listing application to the Ministry of Finance (State Securities Commission) as stipulated in Clause 2.5, Circular No. 59/2004/TT-BTC dated June 18, 2004 of the Ministry of Finance, including: Shareholder register book; A valid copy of the Business Registration Certificate; List and curriculum vitae of members of the board of directors, supervisory board, and general director; Commitment of board of directors, general director, and supervisory board members to hold at least 50% of the shares owned for three years from the date of listing; Joint-stock company articles of association containing content in compliance with the law approved by the shareholders' meeting. Enterprises registering for trading at the Hanoi Stock Exchange submit additional trading registration documents to the Hanoi Stock Exchange, including the joint-stock company articles of association approved by the shareholders' meeting, share issuance results, and shareholder structure holding shares.

- After receiving the listing permit from the State Securities Commission, enterprises applying for listing will register and deposit shares with the Ho Chi Minh City Stock Exchange; Enterprises registering for trading at the Hanoi Stock Exchange will proceed with share depositing and trading procedures after receiving the Trading Registration from the Hanoi Stock Exchange.

PROCEDURE

SALE OF STATE SHARES OF ENTERPRISES THAT HAVE BEEN CONVERTED TO JOINT-STOCK COMPANIES, COMBINED WITH LISTING/TRADING OF SHARES AT STOCK EXCHANGES

( Issued together with Decision No. ... dated ... month ... year 2005 of the Minister of Finance)

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 Step 1. The representative body of the state capital at companies selects and decides to continue selling state shares in joint-stock enterprises that are listed on the Ho Chi Minh City Stock Exchange or registered for trading at the Hanoi Stock Exchange;

Step 2. Immediately after receiving approval of the plan to continue selling state shares from the competent authority, the representative of the state capital at the company issues a decision to continue selling state shares or requests to convene a shareholders' meeting to vote on the decision to sell state shares (if the state shareholder is still within the period of being a founding shareholder and intends to hold less than 20% of the company's shares) and to vote on the listing or registration of shares on the stock exchanges;

Step 3. Prepare documents and materials for the continued sale of state shares; Determine the value of shares and the plan to sell shares to the public. If the total par value of state shares intended for sale exceeds 10 billion VND, it must be auctioned through the stock exchanges, if below 10 billion VND, it can be sold through the stock exchanges or through intermediary organizations. In the share distribution plan, ensure that the proportion of shares sold to outside investors outside the enterprise is consistent with the listing or trading standards at the stock exchanges:

- For cases of listing on the Ho Chi Minh City Stock Exchange, there must be at least 50 outside investors holding more than 20% of the company's charter capital; For companies with a capital of 100 billion VND or more, this ratio is 15%.

- For cases of registering for trading at the Hanoi Stock Exchange, there must be at least 50 shareholders holding shares.

Step 4. Enterprises applying for listing must sign a securities listing advisory contract with a securities company. This organization will participate in advising on the preparation of the securities listing application at the stock exchange. This organization may be the same organization that signed the valuation, auction, or underwriting and distribution contracts.

Step 5. Enterprises applying for listing send the application for permission to list to the Ministry of Finance (State Securities Commission) (as stipulated in Circulars No. 59/2004/TT-BTC dated June 18, 2004 of the Ministry of Finance). Enterprises registering for trading at the Hanoi Stock Exchange send the trading registration application to the Hanoi Stock Exchange (as stipulated in Decision No. 244/QD-BTC dated January 20, 2005 of the Ministry of Finance). For newly converted enterprises within one year, audited financial statements may be replaced by the Decision determining the enterprise value of the competent authority, if an independent auditing organization has participated in the valuation.

For enterprises that were dependent accounting units of corporations prior to being listed for shareholding, they are exempted from the condition that "the production and business operations in the year immediately preceding the listing year must be profitable" if they sell off state shares within one year after the shareholding process and simultaneously register for trading on the Hanoi Stock Exchange.

For companies applying for listing on the Ho Chi Minh City Stock Exchange, it is necessary to review and amend the Articles of Association, or have a schedule to amend the Articles of Association in accordance with the Model Articles of Association issued together with Decision No. 07/2002/QĐ-VPCP dated November 19, 2002 of the Government Office;

Step 6. Prior to implementing the plan to sell shares, the company must publish information on mass media and at designated locations as stipulated in Circular No. 60/2004/TT-BTC dated June 18, 2004 of the Ministry of Finance regarding the issuance of shares to the public. The announcement must clearly state that the shares will be listed or traded on stock exchanges;

Step 7. After the issuance period ends, the enterprise applying for listing must submit additional missing documents in the listing dossier to the Ministry of Finance (Securities Commission) as specified in Clause 2.5 of Circular No. 59/2004/TT-BTC dated June 18, 2004 of the Ministry of Finance, including: the issuance results and the shareholding structure of shareholders; List and brief resumes of members of the board of directors, supervisory board, and management board; Commitment of board of directors, management board, and supervisory board members to hold at least 50% of their owned shares for three years from the date of listing; Corporate charter content consistent with the law approved by the general meeting of shareholders. Enterprises registering for trading on the Hanoi Stock Exchange must submit additional trading registration dossiers to the Hanoi Stock Exchange, including the issuance results and shareholder holding structure.

Step 8. After receiving the listing permit from the Securities Commission, the listed company registers for listing and deposits shares with the Ho Chi Minh City Stock Exchange; Companies registering for trading on the Hanoi Stock Exchange proceed with depositing and trading procedures after receiving the Trading Registration from the Hanoi Stock Exchange.