Circular No. 47/2007/TT-BTC guides the transfer of the right to represent state capital ownership invested in enterprises to the State Capital Investment Corporation.

CIRCULAR

Guidelines for transferring the right to represent state capital ownership invested in enterprises to the State Capital Investment Corporation

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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. 199/2004/NĐ-CP dated December 3, 2004 of the Government promulgating the Financial Management Regulations of State-Owned Companies and the Management of State Capital Invested in Other Enterprises;

Pursuant to Decision No. 151/2005/QĐ-TTg dated June 20, 2005 of the Prime Minister on the establishment of the State Capital Investment Corporation;

Pursuant to Decision No. 152/2005/QĐ-TTg dated June 20, 2005 of the Prime Minister approving the charter and operations of the State Capital Investment Corporation;

The Ministry of Finance provides guidelines for transferring the right to represent state capital ownership invested in enterprises to the State Capital Investment Corporation as follows:

1. Scope of application:

This Circular guides the transfer of the right to represent state capital ownership invested in enterprises from ministries, ministerial-level agencies, government agencies (hereinafter referred to as ministries or sectors), provincial People's Committees (hereinafter referred to as provincial People's Committees) to the State Capital Investment Corporation (hereinafter referred to as the Corporation).

2. Scope of application for transferring the right to represent state capital ownership invested in enterprises:

2.1. The right to represent state capital ownership invested in single-member limited liability companies (LLC) converted from independent state-owned companies.

2.2. The right to represent state capital ownership invested in LLCs with two or more members converted from independent state-owned companies.

2.3. The right to represent state capital ownership invested in joint-stock companies converted from independent state-owned companies or newly established.

2.4. Other cases as decided by the Prime Minister.

3. Principles of transfer:

3.1. Only the right to represent state capital ownership at enterprises will be transferred. The organization and management of other enterprises' business activities and the implementation of state management functions by ministries, sectors, and provincial People's Committees over other enterprises' activities shall be carried out in accordance with current laws.

3.2. The transfer shall be conducted between ministries, sectors, and provincial People's Committees and the Corporation, wherein:

a) The transferring party is the Minister, head of government agencies, Chairman of the provincial People's Committee, or a person authorized in writing.

b) The receiving party is the Chairman of the Corporation's Board of Directors or a person authorized in writing.

3.3. The organization of the transfer shall be carried out for each enterprise with state capital being transferred and after having all necessary documents as stipulated by law and this Circular.

4. Content of transfer:

4.1. For joint-stock companies, it is the value of state shares (based on par value) invested in the enterprise and any remaining amounts that the state must recover.

4.2. For limited liability companies, it is the value of state capital invested in the enterprise.

5. Transfer documents:

5.1. Transfer documents are prepared for each enterprise, including:

a) Report on the value of state capital (or state shares) invested in the enterprise (details according to Appendix No. 1).

b) Report on the amount of money the state still needs to recover from the enterprise (details according to Appendix No. 2).

c) Report on the financial status and business operations of the enterprise (details according to Appendix No. 3).

d) List and information about the representative of state capital at the enterprise (details according to Appendix No. 4).

đ) Minutes of the transfer of the right to represent state capital ownership at the enterprise from ministries, sectors, and provincial People's Committees to the Corporation (model according to Appendix No. 5).

5.2. Legal documents of the company accompanying the documents include:

a) Decision on establishing the company, or decision on converting the state-owned enterprise (copy).

b) Decision or minutes of the competent authority determining the value of state capital at the time the joint-stock company or LLC was granted a business registration certificate (copy if available). In case these documents are not yet available, the transfer will still proceed and be supplemented after signing the minutes.

c) Confirmation letter from the enterprise's Board of Directors regarding the state's investment capital and shares in the enterprise and stock certificates or shareholder certificates or share registers of the state (for joint-stock companies); contribution certificates or member registers of the state (for LLCs with two or more members).

d) Copy of the initial business registration certificate and copy of the most recent business registration certificate (if available).

đ) List of Board of Directors or Chairman of the company, General Director or CEO of the company.

e) Current Charter on the organization and operation of the enterprise (copy).

g) Financial settlement report of the most recent quarter of the enterprise.

5.3. Transfer documents are prepared in four sets to be sent to relevant parties after signing the handover minutes, including:

a) One set sent to the ministry, sector, or provincial People's Committee (for transfer).

b) One set sent to the Corporation (for receipt of transfer).

c) One set sent to the Ministry of Finance (for supervision).

d) One set retained by the transferring enterprise.

6. Basis for determining transfer figures:

6.1. For state-owned enterprises that have completed the conversion process (officially operating under the form of joint-stock companies or LLCs), the basis for determining transfer figures is the financial report data at the most recent period of the enterprise.

6.2. For enterprises currently implementing the conversion as stipulated in Point 8 of this Circular: since these enterprises have not officially been converted into joint-stock companies, the transferred data shall be determined based on the state capital figures according to the Decision approving the plan for converting state-owned enterprises into joint-stock companies issued by Ministries, sectors, provincial People's Committees and the initial public offering results of the enterprise. Upon the official conversion of the enterprise into a joint-stock company, the competent authority responsible for determining the enterprise value must coordinate with the Corporation to inspect and handle financial issues arising from the valuation date to the date when the joint-stock company receives its business registration certificate to re-determine the state capital value and adjust the officially received transfer data in accordance with regulations.

6.3. In case there is a change in the data after the transfer, the Corporation adjusts the officially received transfer data and notifies the Ministry of Finance and the transferring party.

7. Transfer procedure:

7.1. Based on the transfer dossier established by the representative in accordance with this Circular, the Department of Finance and Accounting or the Department of Financial Planning of Ministries, sectors (for central enterprises), Provincial Finance Departments (for local enterprises) shall review the dossier and data, prepare the Minutes of Transfer of State Capital Ownership Rights at each enterprise (Model Appendix No. 5) and report to the leadership of Ministries, sectors, provincial People's Committees or authorized persons to sign the Minutes of Transfer.

7.2. After signing the Minutes of Transfer, Ministries, sectors, provincial People's Committees shall send the Minutes of Transfer (along with the transfer dossier) to the Corporation for acknowledgment of receipt.

7.3. Upon completion of the transfer, the Corporation shall send the Minutes to the transferring party (one copy), the Ministry of Finance (one copy), and the enterprise (one copy).

7.4. In cases where there is disagreement regarding the dossier and data within five working days from the date of receiving the Minutes of Transfer, the Corporation must provide written comments to Ministries, sectors, provincial People's Committees to supplement the dossier and adjust the officially received transfer data, while also notifying the Ministry of Finance to monitor and supervise.

7.5. If necessary, the Corporation may coordinate with Ministries, sectors, provincial People's Committees to convene meetings and exchange views to unify the Minutes and the transfer data.

8. Transfer of the right to represent state ownership in state-invested capital at state-owned enterprises undergoing shareholding reform:

8.1. The transfer of the right to represent state ownership in state-invested capital at state-owned enterprises undergoing shareholding reform shall be implemented concurrently with the process of converting state-owned enterprises.

For enterprises undergoing conversion that fall under the scope of transferring the right to represent state ownership to the Corporation: Ministries, sectors, provincial People's Committees, after issuing the decision approving the conversion plan and completing the initial public offering, shall be responsible for sending a notification letter (accompanied by the transfer dossier as stipulated in Point 8.2 of this Circular) to the Corporation to immediately implement the reception and exercise of state ownership rights before the first shareholders' meeting such as appointing state capital representatives at the enterprise, receiving shareholder registration documents, participating in post-shareholding reform issues...

8.2. The transfer dossier for enterprises undergoing conversion includes:

a) Decision on the shareholding reform of state-owned enterprises by the competent authority.

b) Dossier determining the enterprise's valuation for shareholding reform.

c) Decision on announcing the enterprise's value and approving the shareholding reform plan to convert the state company into a joint-stock company.

d) Results of the initial public offering.

đ) List of member units and the capital contribution of the company at each member unit (in cases of transferring the parent company in a parent-subsidiary model or the full shareholding reform of a holding company).

e) Draft Charter of the Joint-Stock Company's organizational operation (if any).

g) Other relevant materials (if applicable).

9. Implementation organization:

9.1. The Ministry of Finance shall be responsible for:

a) Supervising the process of transferring the right to represent state ownership from Ministries, sectors, and provincial People's Committees to the Corporation.

b) Coordinating with Ministries, sectors, provincial People's Committees, and the Corporation to resolve remaining issues related to the right to represent state ownership in state-invested capital at enterprises that have not been resolved.

9.2. Ministries, sectors, and provincial People's Committees shall be responsible for:

a) Completing the transfer of state capital at enterprises that have completed shareholding reform and conversion from 2006 onwards in the second quarter of 2007 in accordance with the Government's directive at Item b, Point 2, Section III of Resolution No. 03/2007/NQ-CP dated January 19, 2007 on key measures to guide and manage the implementation of the socio-economic development plan and state budget for 2007. For enterprises falling under the transfer scope and having completed shareholding reform and conversion from January 1, 2007 to the effective date of this Circular, they must complete the transfer work within one month from the effective date of this Circular.

b) Directing state capital representatives at enterprises to handle remaining issues related to the right to represent state ownership before the transfer and establish the transfer dossier in accordance with this Circular.

c) Reviewing the transfer dossier and data, preparing and signing the Minutes of Transfer (Model Appendix No. 5) to send to the Corporation (for acknowledgment) in accordance with the guidance of this Circular.

d) Taking the lead and coordinating with the Ministry of Finance and the Corporation to continue resolving remaining issues related to the right to represent state ownership in state-invested capital at enterprises arising before the signing of the Minutes of Transfer.

đ) Implementing state management functions over enterprises that have transferred the right to represent state ownership. The content of state management is stipulated in Articles 161, 162, 164, and 165 of the Enterprise Law 2005.

e) Resolving the status and arranging work for dedicated or concurrent representatives when they no longer hold the function of representing state capital at transferred enterprises.

g) Coordinate and propose to the State Capital Investment Corporation regarding the appointment of a replacement for the state capital representative at the request of the State Capital Investment Corporation.

h) Prior to the transfer, ministries, sectors, and provincial People's Committees shall not decide to sell off part of the capital or adjust the registered capital of the enterprise.

i) In cases where the enterprise meets the conditions but fails to implement the transfer as stipulated in this Circular, it must bear responsibility before the Prime Minister for such delay as well as any financial consequences and losses related to the enterprise.

9.3. Responsibilities of the state capital representative in enterprises:

a) Prepare and be responsible for the accuracy of data in reports: Report on the value of state capital (or shareholding) invested in the enterprise (Annex No. 1); Report on the value of state funds still to be recovered (Annex No. 2); Financial status and business operation report (Annex No. 3); Report on information about the state capital representative (Annex No. 4), and prepare the transfer dossier according to the guidelines set out in this Circular.

b) Coordinate with the enterprise to complete procedures for re-registering state shareholdings or equity contributions from ministries, sectors, and provincial People's Committees to the State Capital Investment Corporation.

c) Urge the enterprise to pay dividends and proceeds from privatization belonging to the state capital in transferred enterprises to the State Capital Investment Corporation.

d) The state capital representative in enterprises appointed by ministries, sectors, and provincial People's Committees prior to the transfer will continue to perform their functions, duties, and powers as prescribed by current laws and regulations of the State Capital Investment Corporation until the Corporation issues a decision to replace them.

đ) In case of failure to fulfill assigned tasks and powers, the competent authority will consider replacing the representative to carry out the tasks. If intentionally delaying the implementation of related transfer activities, they must bear compensation responsibility for any resulting losses (if any).

9.4. Responsibilities of the State Capital Investment Corporation:

a) Accept and exercise rights and obligations as the state capital owner representative in enterprises from the date of receiving the transfer.

b) Lead and coordinate with ministries, sectors, and provincial People's Committees to appoint additional or replacement state capital representatives when necessary.

c) Exercise creditor rights in monitoring and urging transferred enterprises to pay privatization proceeds and dividends belonging to the state capital to the State Capital Investment Corporation (upon authorization by the Ministry of Finance) and settle these payments with the Ministry of Finance.

d) Quarterly report to the Ministry of Finance or report promptly upon request of the Ministry of Finance on:

- Implementation of the transfer of state capital ownership representation rights from ministries, sectors, and provincial People's Committees to the State Capital Investment Corporation.

- Sale of state capital and investment in enterprises.

- Progress in listing enterprises on the Stock Market.

- Collection of outstanding privatization proceeds and dividends belonging to the state capital prior to the transfer of state capital ownership representation rights to the State Capital Investment Corporation.

- Plan for organizing the transfer of state capital ownership representation rights for the next quarter.

Annually, report to the Prime Minister and the Ministry of Finance on the implementation of the transfer of state capital ownership representation rights; results of production and business operations and the implementation of long-term and medium-term plans approved by authorized authorities.

10. Provisions for Implementation:

This Circular takes effect 15 days after its publication in the Official Gazette and replaces Circular No. 81/2005/TT-BTC dated September 19, 2005, issued by the Ministry of Finance on guiding the transfer of state capital ownership representation rights in enterprises to the State Capital Investment Corporation.

During implementation, if there are difficulties, please reflect them to the Ministry of Finance for guidance and resolution./.