Circular No. 60/2004/TT-BTC guiding the issuance of shares to the public

CIRCULAR

Regarding the issuance of shares to the public

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Implementing Decree No. 144/2003/ND-CP dated November 28, 2003 of the Government on securities and the securities market (referred to as Decree 144), the Ministry of Finance guides the issuance of shares to the public as follows:

I. GENERAL PROVISIONS

1. This Circular stipulates the issuance of shares to the public on the territory of the Socialist Republic of Vietnam, except for the issuance of shares by credit organizations, state-owned enterprises, and foreign-invested enterprises when converting to joint-stock companies.

2. Issuing shares to the public as prescribed in this Circular includes initial issuance and additional issuance.

2.1. Initial issuance of shares to the public includes:

2.1.1. Initial issuance of shares to the public to raise capital for joint-stock companies (primary offering);

2.1.2. Initial issuance of shares to the public to change the ownership structure (secondary offering).

2.2. Additional issuance of shares to the public includes:

2.2.1. An organization that has issued shares to the public offers additional shares or rights to purchase shares to increase its charter capital;

2.2.2. An organization that has issued shares to the public issues additional shares to pay dividends, or issues additional share bonuses to increase its charter capital from its own capital.

3. Share certificates issued to the public under this Decree must contain all necessary information as prescribed by law. In cases where shares are issued in the form of book-entry records, the buyer of the shares shall be issued a certificate of ownership.

II. SPECIFIC PROVISIONS

1. Conditions for issuing shares to the public for the first time

1.1. The subscribed charter capital at the time of registration for share issuance must be a minimum of five billion Vietnamese dong based on book value.

1.2. Profitable business operations mean that the organization registering for share issuance must have positive net profit after tax in the year immediately preceding the year of registration for issuance, and there should be no accumulated losses up to the year of registration for issuance.

1.3. A feasible plan for using funds raised from the share issuance round must be a plan approved by the General Meeting of Shareholders.

1.4. The issuance of shares must be conducted through intermediary organizations.

1.5. Issuing shares to the public to establish a new joint-stock company operating in infrastructure construction, high technology does not necessarily require compliance with points 1.1 and 1.2 above.

2. Registration Documents for Issuance

2.1. Registration documents for the initial issuance of shares to the public include:

2.1.1. A registration application form prepared according to Model Form No. 01 attached to this Circular;

2.1.2. A certified copy of the Business Registration Certificate, including any certificates of business change registration;

2.1.3. The Company Charter containing provisions consistent with the laws, without restrictions on the transfer of ordinary shares of ordinary shareholders, except for shares held by members of the Board of Directors, Management Board, and Supervisory Board;

2.1.4. The decision of the General Meeting of Shareholders approving the issuance of shares to the public; The decision of the General Meeting of Shareholders approving the feasible plan for using funds raised from the primary offering to the public;

2.1.5. A prospectus prepared according to Model Form No. 02 attached to this Circular and must meet the following requirements:

- Contain all necessary information, truthful and clear, enabling investors and securities companies to accurately assess the financial situation, business operation status, and prospects of the organization registering for issuance;

- Financial data in the prospectus must be consistent with the audited financial statements in the registration documents;

- Must be signed by the Chairman of the Board of Directors, Head of the Supervisory Board, Director (General Director), Chief Accountant of the organization registering for issuance and the Legal Representative of the main underwriting organization (if any). In case of proxy signing, a power of attorney must be provided;

2.1.6. A list and brief resumes of members of the Board of Directors, Management Board, and Supervisory Board prepared according to Model Form No. 03 attached to this Circular;

2.1.7. Two consecutive annual financial reports immediately preceding the year of registration for issuance must meet the following requirements:

- Comply with the current accounting regulations of the State;

- Annual financial reports must be confirmed by an independent auditing organization. The audit opinion on the financial statements must express full acceptance or acceptance with exceptions. If the audit opinion is acceptance with exceptions, then the exception items must not significantly affect the financial situation of the organization registering for issuance;

- If the period from the end date of the most recent financial report to the date of submitting the registration documents to the State Securities Commission exceeds ninety days, the organization registering for issuance must prepare supplementary financial reports up to the latest month or quarter;

- If there are unusual changes after the end of the fiscal year of the most recent financial report, the issuing organization needs to prepare additional financial reports up to the latest month or quarter;

- Financial statements, if they are copies, must be valid copies as prescribed by law;

For newly established joint-stock companies as specified in Clause 4, Article 6 of Decree 144, financial reports can be replaced by production and business plans approved by competent authorities (if any) or a joint and several liability commitment from the Board of Directors and founding shareholders.

2.1.8. Underwriting commitment (if any) according to Model Form No. 04 attached to this Circular. In case of a combined underwriting group, the underwriting commitment of the main underwriter must be accompanied by a contract between the underwriters. Documents regarding the underwriting commitment must be submitted after other documents but no later than the day the State Securities Commission issues the registration certificate.

2.2. Registration Documents for Additional Issuance of Shares to the Public

2.2.1. In the case where an organization that has issued shares to the public registers for additional issuance of shares or shares accompanied by rights to purchase shares to increase its charter capital, the registration documents for additional issuance include:

a. Application for additional issuance;

b. Decision of the General Meeting of Shareholders on additional issuance of shares and approval of distribution plans and use of proceeds;

c. Supplementary documents for the prospectus.

2.2.2. In the case where an organization registers for issuing and distributing shares to pay dividends or to distribute bonus shares to increase the registered capital from its own capital, the registration documents for issuance shall include the documents prescribed in points a and b of Clause 2.2.1 above and documents proving the lawful source of funds used to issue additional shares in accordance with the provisions of the law.

2.2.3. The registration documents for additional share issuance in multiple tranches must be supplemented with information about the company's situation and the implementation status of the project before each issuance round, if the time point of the subsequent issuance round is six months or more apart from the previous issuance round.

3. Guarantee for Issuance

3.1. The guarantor organization for issuance must meet the conditions stipulated in Article 11 of Decree 144, specifically:

3.1.1. Possess a license for guaranteeing issuance activities issued by the State Securities Commission;

3.1.2. Only permitted to guarantee for one issuance round with a total value of shares not exceeding 30% of the guarantor organization’s own capital. The own capital referred to herein is the own capital reflected in the most recent audited financial report prior to the submission of the application, and the value of the shares permitted to be guaranteed for issuance is calculated based on the issuance price.

3.2. In cases where there are two or more guarantor organizations for issuance, a joint guarantor organization must be established and operate based on a contract between the guarantor organizations. The main guarantor organization represents the joint guarantor organization in signing the issuance guarantee contract with the issuer. The responsibility of the guarantor organizations for the distribution of shares may be joint liability or independent liability.

3.3. Documents proving that the guarantor organization meets the conditions for performing guarantees as prescribed above must be submitted along with the issuance guarantee commitment to the State Securities Commission.

4. Registration for Issuance

4.1. The registration documents for public share issuance must be prepared in two sets (one original set and one certified copy) and sent to the State Securities Commission.

4.2. Amendments and supplements to the registration documents can be made when the registering organization deems it necessary to make changes or upon request by the State Securities Commission. Any amendments and supplements must bear the signatures of those who signed the original registration documents submitted to the State Securities Commission or individuals holding the same positions as those mentioned.

4.3. Organizations registering for issuance may not publicly issue shares until they have received the issuance registration certificate from the State Securities Commission and have published the Prospectus.

4.4. In cases where, after issuance registration certificates have been issued, the State Securities Commission or the issuer finds it necessary to amend or supplement the registration documents, the issuer must submit supplementary materials for the Prospectus and promptly announce such changes through the previously announced issuance channels, while providing the information to investors upon their request.

4.5. Within thirty working days from the date of receipt of complete and valid documents, the State Securities Commission shall issue the registration certificate for public share issuance. In cases where the issuance registration certificate is refused, the State Securities Commission shall provide a written explanation of the reasons.

5. Information Prior to Issuance and Announcement of Issuance

5.1. During the period when the State Securities Commission is reviewing the issuance registration documents, the registering organization, the guarantor organization, and related parties may not advertise, solicit, or distribute shares to the public in any form. Market research materials may not contain misleading information compared to the main contents of the full Prospectus submitted to the State Securities Commission.

5.2. The issuance must be announced within the prescribed timeframe with the contents specified in the Issuance Notice model (Annex 5 attached hereto).

5.3. Materials serving the issuance process include: the Issuance Notice, the full Prospectus or the Summary Prospectus, and supplementary materials to the Prospectus (if any), all of which have been approved by the State Securities Commission. The issuer and related organizations and individuals may not distribute materials containing misleading information that could mislead investors. The Summary Prospectus must truthfully reflect the contents of the full Prospectus and include major headings similar to those in the full Prospectus already approved by the State Securities Commission.

6. Distribution of Securities

6.1. The issuer or distributor must distribute shares at the selling price determined in the full Prospectus registered with the State Securities Commission or through an auction price formation process.

6.2. When distributing shares to the public, the issuer must facilitate individual investors' purchase of shares. The subscription form for purchasing shares must clearly state the location for obtaining the Prospectus.

6.3. Funds for purchasing shares must be transferred into a frozen account opened at a bank until the issuance round is completed.

6.4. In cases where a purchaser of shares suffers losses due to misleading or concealed information in the Prospectus and other issuance materials, the issuer, the Chairman and members of the Board of Directors, the Head of the Supervisory Board, the Director (General Director), the Chief Accountant, and those involved in preparing the issuance registration documents, the consulting organization, the guarantor organization, the independent auditing organization, and those who sign the audit confirmation report for the issuer's financial statements will be subject to administrative penalties as prescribed in the securities and securities market regulations.

6.5. The issuer and guarantor organization must transfer shares or share ownership certificates to the purchaser within thirty days from the end of the issuance round.

6.6. The issuing organization or the distributing organization must complete the distribution of shares within ninety days from the date the registration certificate for issuance becomes effective. Upon expiration of this period, if there are still unsold shares, the issuing organization wishing to continue the distribution must submit a written request to the State Securities Commission for an extension of the registration certificate, specifying the reasons and the plan for distributing the remaining shares.

6.7. The provisions from point 6.1 to 6.6 above shall not apply in cases where shares are distributed as dividends or bonus shares are distributed to increase the registered capital from the owners' equity.

7. Revocation of the Registration Certificate for Issuance

7.1. Within five working days from the date the State Securities Commission decides to revoke the Registration Certificate for Issuance, the issuing organization must announce the revocation on the information media that had published the issuance, with the following contents:

- The number and date of the Decision to Revoke the Registration Certificate for Issuance;

- Reasons for revoking the Registration Certificate;

- The time frame for refunding the purchase price or deposit for purchasing shares to investors;

- Location for refunding the purchase amount or deposit to the investors;

- Payment method.

7.2. In addition to the specific cases of revocation stipulated in Article 17 of Decree 144, the Registration Certificate for Issuance will also be revoked if the issuing organization fails to complete the distribution of shares within the time limit specified in point 6.6, Section II of this Circular.

8. Reporting and Disclosure Requirements

8.1. The report on the results of the issuance shall be prepared according to the form set out in Appendix 06 attached to this Circular and submitted along with a confirmation from the bank where the escrow account was opened regarding the amount collected during the issuance.

8.2. The reporting and information disclosure of the Issuer Organization shall be carried out in accordance with the provisions of Chapter VI of Decree 144 and the Circular guiding the information disclosure system issued by the Ministry of Finance.

III. IMPLEMENTATION

1. This Circular shall take effect fifteen days from the date of publication in the Official Gazette.

Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairmen of Provincial People's Committees, Chairmen of Management Councils, Directors (General Directors) of issuing organizations, Securities Companies, and Heads of relevant units are responsible for implementing this Circular.

2. During implementation, if there are any difficulties, it is recommended that related organizations and individuals reflect them to the Ministry of Finance for research, guidance, and resolution./.