Decree No. 69/2014/NĐ-CP on State Economic Groups and State Corporations

 DECREE

Regarding state-owned economic groups and state-owned corporations.specialized agency under the People's Committee of the province/city.

________________

 

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Enterprise Law dated November 29, 2005;

At the proposal of the Minister of Planning and Investment,

The Government issues a Decree on state-owned economic groups and state-owned corporations.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree provides for:

1. Establishment, restructuring, termination of operations under the form of state-owned economic groups and state-owned corporations (hereinafter referred to as economic groups and corporations).

2. Organization, operation, management, and administration within economic groups and corporations.

3. Management and supervision by the state owner over economic groups and corporations.

Article 2. Applicability

The objects subject to this Decree include:

1. Economic groups and corporations have a parent company organized in the form of a single-member limited liability company owned by the State or a parent company that is a joint-stock company or a limited liability company with two or more members having controlling shares or contributions from the State.

2. Organizations and individuals related to the establishment, restructuring, termination of operations under the form of economic groups and corporations, and the implementation of state owner management and supervision over economic groups and corporations.

Article 3. Explanation of Terms

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

1. "Main business of the enterprise" is the business established from the purpose of investment for establishment and the development strategy of the enterprise, defined by the owner and assigned to the enterprise to implement at the time of establishment and throughout its operational period.

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

3. "Business unrelated to the main business of the enterprise" (hereinafter referred to as unrelated business) is business not derived or developed from the main business or related business.

4. "Related party of the parent company" is an organization or individual having direct or indirect relations with the parent company as stipulated in Clause 17, Article 4 of the Enterprise Law.

5. "Controlling power" of one enterprise over another includes at least one of the following rights:

a) The sole ownership right of the enterprise;

b) The shareholder or capital contributor's controlling right of the enterprise;

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

d) The right to directly or indirectly decide on the approval, amendment, or supplementation of the Articles of Association of the enterprise;

đ) The right to directly or indirectly decide on the strategy and business plan of the enterprise;

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

6. "Member enterprises of economic groups and corporations" (hereinafter referred to as member enterprises) are enterprises directly held by the parent company or second-tier enterprises with 100% of the charter capital or controlling power over such enterprises.

Article 4. Economic Groups and Holding Companies

1. An economic group is a group of companies consisting of a parent company, member enterprises, and affiliated companies, meeting the conditions specified in Clause 3, Article 9 of this Decree.

2. A holding company is a group of companies consisting of a parent company, member enterprises, and affiliated companies, meeting the conditions specified in Clause 4, Article 9 of this Decree.

3. An economic group or holding company shall have no more than three levels of enterprises and shall have the following structure:

a) The parent company (hereinafter referred to as Level I enterprise) is an enterprise in which the State holds 100% of the charter capital or has controlling rights. The parent company may be organized in the form of a single-member limited liability company owned by the State or a joint-stock company, a limited liability company with two or more members having State-controlled shares; it plays a core leadership and controlling role over member enterprises within the economic group or holding company;

b) The subsidiary of the Level I enterprise (hereinafter referred to as Level II enterprise) is an enterprise controlled by the parent company. The Level II enterprise may be organized in the form of a single-member limited liability company if the parent company holds 100% of the charter capital, or a joint-stock company, a limited liability company with two or more members if the parent company has controlling rights;

c) The subsidiary of the Level II enterprise (hereinafter referred to as Level III enterprise) is an enterprise controlled by the Level II enterprise. The Level III enterprise may be organized in the form of a single-member limited liability company if the Level II enterprise holds 100% of the charter capital, or a joint-stock company, a limited liability company with two or more members if the Level II enterprise has controlling rights;

d) An affiliated company is a company that has shares or contributions below the level of control of the parent company and subsidiaries; a company without contributions from the parent company and subsidiaries, voluntarily participating in affiliation through an affiliation agreement and maintaining a long-term relationship of mutual benefit in terms of economics, technology, markets, and other services with the parent company or subsidiaries within the economic group or holding company. An affiliated company may be organized in the form of a limited liability company or a joint-stock company.

4. The parent company and member enterprises have their own legal personality; they have their own capital and assets; they have the right to possess, use, and dispose of their assets according to the provisions of the law and the common agreement of the economic group or holding company. The State is the direct owner of state capital invested in the parent company. The parent company is the owner of capital invested by the parent company in subsidiaries and affiliated companies.

Article 5. Name and Business Registration

1. An economic group or holding company has its own name and brand. The person deciding to establish an economic group or holding company decides on the name of the economic group or holding company and the name of the founding parent company according to this Decree.

2. The parent company and member enterprises register for business according to the provisions of the law. Naming of member enterprises organized in the form of a joint-stock company or a limited liability company is carried out according to the provisions of the Enterprise Law and related laws.

An economic group or holding company does not have legal personality and does not need to register for business but must notify the establishment, restructuring, changes in the number of member enterprises, capital ratios at member enterprises, cessation of operations in the form of an economic group or holding company to the business registration authority; economic concentration as stipulated in Sections 3 and 4 of Chapter II of the Competition Law to the Competition Management Authority.

The procedures and formalities for notifying the establishment, restructuring, changes in the number of member enterprises, capital ratios at member enterprises, cessation of operations in the form of an economic group or holding company are implemented according to the guidance of the Ministry of Planning and Investment.

Article 6. Party organizations and political-social organizations in economic groups and holding companies

1. The Communist Party of Vietnam organization in economic groups and holding companies operates in accordance with the Constitution, laws, and the Charter of the Communist Party of Vietnam.

2. Political-social organizations in economic groups and holding companies operate in accordance with the Constitution, laws, and the charters of those organizations, consistent with the provisions of the law.

3. Economic groups and holding companies create conditions and support for Party organizations, Trade Union organizations, and other political-social organizations to operate in accordance with the provisions of the law and the charters of those organizations.

Article 7. Application of relevant laws and international treaties

1. The establishment, organization, operation, management, and supervision of economic groups and holding companies shall be carried out in accordance with the provisions of this Decree, the Enterprise Law, the Competition Law, and other relevant legal provisions. In cases where there are differences between this Decree and specialized laws, the provisions of the specialized laws shall apply.

2. Where an international treaty to which the Socialist Republic of Vietnam is a party provides different provisions from those of this Decree, the provisions of the international treaty shall apply.

Chapter II

ESTABLISHMENT, REORGANIZATION, AND TERMINATION OF OPERATIONS IN THE FORM OF ECONOMIC GROUPS AND HOLDING COMPANIES

Article 8. Establishment of economic groups and holding companies

1. Economic groups and holding companies are established based on state-owned holding companies or groups of companies that meet the conditions stipulated in Article 9 of this Decree.

2. Economic groups and holding companies are established through the following forms:

a) Merger or consolidation of enterprises;

b) Acquisition of shares or equity contributions;

c) Investment or contribution of tangible or intangible assets;

d) Other forms of association agreed upon by enterprises, not contrary to legal provisions.

Article 9. Conditions for establishing economic groups and holding companies

1. The Government will only consider selecting state-owned holding companies to form economic groups when they fully meet the conditions set forth in Clause 2 of this Article and establish new economic groups and holding companies when they fully meet the conditions prescribed in Clauses 3 and 4 of this Article.

2. State-owned holding companies selected to form economic groups must fully meet the following conditions:

a) Operating profitably for three consecutive years immediately preceding the year of selection;

b) Financial situation assessed by the owner at a level ensuring safety;

c) Human resource qualifications and labor productivity higher than the average of other enterprises operating in the same industry or field;

d) Equipment and technology levels at advanced standards; modern management;

đ) Effectively managing shares and equity contributions in other enterprises;

e) Operating nationwide and abroad.

3. Proposed economic groups must meet the following conditions:

a) Engaging in main industries or fields of business belonging to key sectors in ensuring national economic security; laying the foundation for the national economic infrastructure; enhancing the competitiveness of enterprises and the entire economy. The Prime Minister shall specify the industries or fields of business eligible for consideration for the formation of economic groups during each period;

b) The parent company in the economic group must meet the following conditions:

- The registered capital of the parent company must not be less than 100 trillion VND. In the case of the parent company being organized in the form of a joint-stock company or a limited liability company with two or more members, the state-owned share must account for at least 75% of the registered capital of the parent company. The Prime Minister shall examine and decide on cases where the registered capital or the ratio of state-owned capital to the registered capital of the parent company is lower than the specified level.

- Having human resources with sufficient qualifications, experience, and business capabilities in the main industry or field and related industries; managing investment capital and coordinating the operations of subsidiary companies and associated companies.

- Possessing the ability to utilize technological secrets, brands, and markets to control subsidiary companies and conduct associations with other associated companies.

- Having financial resources or feasible plans to mobilize financial resources, ensuring adequate investment in subsidiary companies and associated companies.

c) The economic group must have at least 50% of its subsidiary companies operating in critical stages of the main industry or field of business, and the total value of shares and equity contributions of the parent company in these subsidiary companies must be at least 60% of the total investment capital of the parent company in subsidiary and associated companies.

Subsidiary companies wholly owned by the parent company must be companies established to develop and hold technological secrets directly serving the implementation of the main business tasks of the parent company.

4. Newly proposed holding companies must meet the following conditions:

a) Engaging in main industries or fields of business belonging to key sectors in laying the foundation for industrial development or regional development; enhancing the competitiveness of enterprises and industries or regions. The Prime Minister shall specify the industries or fields of business eligible for consideration for the formation of holding companies during each period;

b) The parent company in the holding company must meet the following conditions:

- The registered capital of the parent company must not be less than 18 trillion VND. For the parent company organized in the form of a joint-stock company or a limited liability company with two or more members, the state-owned share must account for at least 65% of the registered capital of the parent company. The Prime Minister shall examine and decide on cases where the registered capital or the ratio of state-owned capital to the registered capital of the parent company is lower than the specified level.

- Having human resources with sufficient qualifications, experience, and business capabilities in the main industry or field and related industries; managing investment capital and coordinating the operations of subsidiary companies and associated companies.

- Having financial resources or feasible plans to mobilize financial resources, ensuring adequate investment in subsidiary companies and associated companies.

c) The holding company must have at least 50% of its subsidiary companies operating in critical stages of the main industry or field of business, and the total value of shares and equity contributions of the parent company in these subsidiary companies must be at least 60% of the total investment capital of the parent company in subsidiary and associated companies.

Subsidiary companies wholly owned by the parent company must be companies established to develop and hold technological secrets directly serving the implementation of the main business tasks of the parent company.

Article 10. Procedures and formalities for establishing economic groups and holding companies

1. Based on the conditions stipulated in Article 9 of this Decree, the Prime Minister decides which parent companies in holding companies and groups of companies are permitted to develop Proposals for establishing economic groups and holding companies during each period, based on the proposal of the Ministry managing the sector, the People's Committee of the province or centrally governed city (hereinafter referred to as the provincial People's Committee) and the opinion of the Ministry of Planning and Investment.

2. The Board of Members or the authorized representative exercising the rights of state shareholders (hereinafter referred to as the authorized representative) at the parent company in the holding company or group of companies shall be responsible for developing the Proposal for establishing economic groups and holding companies to submit to the Ministry managing the sector and the provincial People's Committee for consideration and comments to perfect the draft Proposal.

3. Documents for establishing economic groups and holding companies include:

a) A submission regarding the Proposal;

b) The Proposal for establishing economic groups and holding companies.

The Proposal includes the following main contents: The necessity and purpose of establishing economic groups and holding companies; the current organizational management and operation status of the holding company or group of companies; the method of formation and structure of the economic group or holding company; the method of building, maintaining, and developing forms of association between the parent company and member enterprises and among member enterprises; the method of establishing the parent company, including the plan for the privatization of the parent company in cases where the economic group is formed simultaneously with the privatization of 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; the main business fields and related fields; the investment structure in various industries within the economic group or holding company; the plan for utilizing and developing leadership and management human resources at the parent company; human resources implementing the function of representing the owner of the parent company at member enterprises; the business operation plan of the economic group or holding company; analysis of performance indicators before and after the establishment of the economic group or holding company; assessment of economic and social impacts and the appropriateness of the establishment of the economic group or holding company with industry, sector, and territorial development plans; reports on procedures for economic concentration according to competition laws; organization, activities, management, and operation within the economic group or holding company; information systems and mechanisms ensuring smooth communication throughout the economic group or holding company; the roadmap and implementation plan for the Proposal.

c) A draft Charter of the parent company.

4. Reviewing the Proposal:

a) For the establishment of economic groups:

- The Ministry managing the sector prepares at least eight (08) original files proposing the establishment of economic groups and sends them to the Ministry of Planning and Investment.

- The Ministry of Planning and Investment takes the lead in soliciting opinions from the Ministries of Finance, Labor, Invalids and Social Affairs, Home Affairs, the provincial People's Committee where the parent company is headquartered, and at least three (03) independent economists.

Within thirty (30) working days from the date of receipt of the file proposing the establishment of an economic group, relevant agencies and individuals must send their opinions in writing to the Ministry of Planning and Investment for participation in the review of matters within their functional responsibilities.

- Within fifteen (15) working days from the date of receipt of written opinions from relevant agencies, the Ministry of Planning and Investment submits the file and a report on the review of the file proposing the establishment of an economic group to the Prime Minister for consideration and decision.

b) For the establishment of holding companies:

- The Ministry managing the sector and the provincial People's Committee prepare five (05) original files proposing the establishment of holding companies and take the lead in soliciting opinions from the Ministries of Planning and Investment, Finance, Labor, Invalids and Social Affairs, Home Affairs, the Ministry managing the sector (for holding companies under the provincial People's Committee), and the provincial People's Committee where the parent company is headquartered (for holding companies under the Ministry managing the sector).

- Within fifteen (15) working days from the date of receipt of the file proposing the establishment of a holding company, relevant agencies must send their opinions in writing to the Ministry managing the sector (for holding companies under the Ministry managing the sector) and the provincial People's Committee (for holding companies under the provincial People's Committee) for participation in the review of matters within their functional responsibilities.

- Within fifteen (15) working days from the date of receipt of written opinions from relevant agencies, the Ministry managing the sector and the provincial People's Committee prepare a report on the review, explaining the adoption of opinions from relevant agencies, completing the file, and submitting it to the Prime Minister for consideration and approval.

5. Approving the Proposal:

Based on the conditions stipulated in this Decree and the review report, the Prime Minister approves: The Proposal for establishing economic groups; the policy for establishing holding companies under ministries and provincial People's Committees.

6. Implementing the Proposal for establishing economic groups and holding companies:

a) For economic groups:

- In cases where an economic group is established with a parent company operating under the form of a limited liability company with a single shareholder being the State: The Prime Minister decides to establish the parent company; appoints the Chairman of the Board of Members of the parent company upon the proposal of the Ministry managing the sector after obtaining the opinion of the Ministry of Home Affairs. The Minister of the Ministry managing the sector decides to appoint members of the Board of Members, General Director, and specialized Inspector of the parent company. The Minister of Finance decides to appoint the financial Inspector of the parent company.

- In the case of establishing an economic group with a parent company operating under the form of a joint-stock company or a limited liability company with two or more shareholders having state-controlled shares or capital contributions, or in the case of simultaneously establishing an economic group and converting the parent company into a joint-stock company or a limited liability company with two or more shareholders having state-controlled shares or capital contributions: The Minister of the industry management ministry shall appoint a representative to act on behalf of the parent company; decide to nominate candidates for the position of Chairman and members of the Board of Directors, Management Board of the parent company.

- The Management Board or the representative acting on behalf of the parent company and the person nominated to join the Board of Directors of the parent company are responsible for exercising controlling rights to guide the General Meeting of Shareholders, Management Board, and Board of Directors of the parent company to continue implementing the Project; develop forms of association within the parent company - subsidiary group, among member enterprises during the implementation of the Project and the operation of the economic group. The Management Board or the representative acting on behalf of the parent company must report to the owner on the progress of implementing the Project, difficulties and obstacles arising, and coordinate with relevant agencies to implement it.

b) For holding companies:

- In the case of establishing a holding company with a parent company operating under the form of a single-member limited liability company owned by the State: The Minister of the industry management ministry, the Chairman of the People's Committee of the province shall decide to establish the parent company; appoint the Chairman of the Management Board, members of the Management Board, General Director, and Auditor of the parent company.

- In the case of establishing a holding company with a parent company operating under the form of a joint-stock company or a limited liability company with two or more shareholders having state-controlled shares or capital contributions, or in the case of simultaneously establishing a holding company and converting the parent company into a joint-stock company or a limited liability company with two or more shareholders having state-controlled shares or capital contributions: The Minister of the industry management ministry, the Chairman of the People's Committee of the province shall appoint a representative to act on behalf of the parent company; decide to nominate candidates for the position of Chairman and members of the Board of Directors, Management Board of the parent company.

- The Management Board or the representative acting on behalf of the parent company and the person nominated to join the Board of Directors of the parent company are responsible for exercising controlling rights to guide the General Meeting of Shareholders, Management Board, and Board of Directors of the parent company to continue implementing the Project; develop forms of association within the parent company - subsidiary group, among member enterprises during the implementation of the Project and the operation of the holding company. The Management Board or the representative acting on behalf of the parent company must report to the owner on the progress of implementing the Project, difficulties and obstacles arising, and coordinate with relevant agencies to implement it.

7. In the case of holding companies, groups of companies that self-develop and meet all conditions stipulated in Article 9 of this Decree, the procedures and formalities for establishing an economic group, holding company shall be carried out as follows:

a) For holding companies that self-develop and meet all conditions for establishing an economic group:

- The Management Board or the representative acting on behalf of the parent company shall build a Report proposing the establishment of an economic group and submit it to the industry management ministry.

- The industry management ministry shall prepare a Report proposing the establishment of an economic group and submit it to the Ministry of Planning and Investment. The Ministry of Planning and Investment shall take the lead in soliciting opinions from the Ministries of Finance, Labor, War Invalids and Social Affairs, Home Affairs, and the People's Committee of the province where the parent company is headquartered. The Ministry of Planning and Investment shall submit a consolidated report of the opinions of related agencies to the Prime Minister for consideration and decision.

b) For groups of companies that self-develop and meet all conditions for establishing a holding company:

- The Management Board or the representative acting on behalf of the parent company shall build a Report proposing the establishment of a holding company and submit it to the industry management ministry or the People's Committee of the province.

- The industry management ministry or the People's Committee of the province shall prepare a Report proposing the establishment of a holding company and solicit opinions from the Ministries of Planning and Investment, Finance, Labor, War Invalids and Social Affairs, Home Affairs, the industry management ministry (for holding companies under the People's Committee of the province), and the People's Committee of the province where the parent company is headquartered (for holding companies under the industry management ministry). The industry management ministry and the People's Committee of the province shall prepare a consolidated report of the opinions of related agencies for submission to the Prime Minister for consideration and decision.

Article 11. Restructuring economic groups and corporations

1. Economic groups and corporations may be restructured in the following forms:

a) Merger of the parent company with one or more companies of the same type, but still owned by the State or holding controlling shares or capital contributions;

b) Consolidation of the parent company with one or more companies of the same type, but still owned by the State or holding controlling shares or capital contributions;

c) Division of the parent company into several companies of the same type, with the State still being the owner or holding controlling shares or capital contributions;

d) Spin-off of the parent company into several companies of the same type, with the State still being the owner or holding controlling shares or capital contributions;

đ) Conversion of the parent company operating as a single-member limited liability company owned by the State into a limited liability company with two or more members or a joint-stock company, while still maintaining control;

e) Increase or decrease in the number of second-tier and third-tier enterprises.

2. Conditions for restructuring:

Economic groups and corporations shall be restructured when they meet all of the following conditions:

a) Compliance with the overall plan for enterprise restructuring with 100% state-owned capital that has been approved by the Prime Minister. In cases where the restructuring of economic groups and corporations is not specified in the overall plan for enterprise restructuring with 100% state-owned capital approved by the Prime Minister, the sectoral management ministry (for economic groups and corporations specified in Clause 2, Article 7 of Decree No. 99/2012/NĐ-CP dated November 15, 2012 of the Government on the delegation and decentralization of the rights, responsibilities, and obligations of state owners towards state-owned enterprises and state capital invested in enterprises (hereinafter referred to as Decree No. 99/2012/NĐ-CP) and corporations under the ministry) and the provincial People's Committee (for corporations under the provincial People's Committee) must submit to the Prime Minister for decision;

b) After restructuring, economic groups and corporations must still meet all conditions stipulated in Article 9 of this Decree.

3. Procedures for restructuring economic groups and corporations:

a) The restructuring of economic groups and corporations through merger, consolidation, division, or spin-off of the parent company shall be carried out in accordance with the laws on corporate restructuring and the overall plan for enterprise restructuring with 100% state-owned capital that has been approved by the Prime Minister;

b) The restructuring of economic groups and corporations through increasing or decreasing the number of second-tier and third-tier enterprises shall be carried out in accordance with the overall plan for enterprise restructuring with 100% state-owned capital that has been approved by the Prime Minister.

Article 12. Ceasing operations as an economic group or corporation

1. Economic groups and corporations must cease operations as such in the following cases:

a) The parent company is dissolved or bankrupt;

b) Economic groups and corporations no longer meet the conditions stipulated in Article 9 of this Decree;

c) The parent company is consolidated or merged with another enterprise without the State retaining controlling shares or capital contributions;

d) Other cases as prescribed by the Government or the Prime Minister.

2. Procedures and formalities:

a) In the case of dissolution or bankruptcy of the parent company, it shall be implemented according to the laws on dissolution and bankruptcy. The Ministry of Finance will guide debt settlement; the Ministry of Labor, Invalids, and Social Affairs will guide policies for employees when the parent company in the economic group or corporation is dissolved;

b) In the case where economic groups and corporations no longer meet the conditions stipulated in Article 9 of this Decree, it shall be implemented according to the overall plan for enterprise restructuring with 100% state-owned capital that has been approved by the Prime Minister.

Annually, the sectoral management ministry and the provincial People's Committee shall conduct reviews and propose:

- The Ministry of Planning and Investment to review and submit to the Prime Minister for decision to cease operations as an economic group for those economic groups that do not meet the conditions stipulated in Article 9 of this Decree.

- The Prime Minister to approve the policy to cease operations as a corporation for those corporations that do not meet the conditions stipulated in Article 9 of this Decree.

Chapter III

MANAGEMENT AND OPERATIONS IN ECONOMIC GROUPS AND CORPORATIONS

Section 1

MANAGEMENT AND OPERATIONS OF ECONOMIC GROUPS AND CORPORATIONS

Article 13. Principles for managing and operating economic groups and holding companies

Managing and operating economic groups and holding companies shall be carried out through one or more of the following methods:

1. Managing and operating through the parent company.

2. Managing and operating through investment forms, cooperation; agreements, joint use of common services throughout the economic group or holding company; implementing common regulations, standards, and quotas throughout the economic group or holding company in compliance with the law; using each other's products and services according to market principles.

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

Article 14. Managing and operating economic groups and holding companies through the parent company

1. The parent company represents the economic group or holding company in carrying out common activities of the economic group or holding company in relations with third parties both domestically and internationally, or other activities agreed upon with member enterprises and relevant laws.

2. The parent company uses the rights and obligations of the owner, shareholder, or member at member enterprises to coordinate and guide the following activities of the economic group or holding company;

a) Utilizing the management and operation system at the parent company or establishing a separate department to study, formulate strategies, propose solutions to coordinate and guide the activities specified in Clause 3 of this Article to be submitted to the Board of Members or the Board of Directors of the parent company for approval; through authorized representatives at subsidiaries and associated companies to implement the coordination and guidance contents specified in Clause 3 of this Article;

b) Through the implementation of economic contracts, association contracts with subsidiaries and associated companies to coordinate and guide the activities of the economic group or holding company;

c) Establishing unified regulations within the economic group or holding company.

3. The coordination and guidance content of the parent company includes:

a) Formulating and organizing the implementation of development strategies, joint business plans of the economic group or holding company; guiding the business strategies of subsidiaries according to the development strategy and joint business plan of the economic group or holding company; formulating and organizing the implementation of management and operation regulations and unified standards and quotas within the economic group or holding company;

b) Classifying member enterprises based on their position and importance in the overall development strategy of the economic group or holding company; determining the list of main industries and key member enterprises; guiding member enterprises according to the main industries; managing and guiding authorized representatives to ensure the controlling rights of the parent company at key member enterprises;

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

d) Guiding objectives, investments, production and business indicators; division of labor, specialization, cooperation; market access, expansion, and sharing; exports, brand usage, information services, scientific and technological research and application, training, and other activities of member enterprises according to the general policy of the economic group or holding company;

đ) Building and implementing corporate brand management regulations; guiding common elements in the names of subsidiaries and associated companies;

e) Guiding organizational structure and personnel for subsidiaries;

g) Guiding the content of the Articles of Association, supervising the 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 subsidiaries and associated companies;

i) Serving as the focal point to aggregate resources from member enterprises and associated enterprises to carry out joint bidding and implement joint projects agreed upon and implemented by subsidiaries and associated companies;

k) Providing research, technology transfer, marketing, trade promotion, and other services to subsidiaries and associated companies;

l) Coordinating the formation, management, and effective use of common funds; financial monitoring and risk control; supporting financial activities (arranging capital, providing capital support, and other forms) for member enterprises within the economic group or holding company when requested by the enterprise;

m) Coordinating the performance of administrative tasks and transactions with partners for member enterprises within the economic group or holding company when requested by the enterprise; performing public service tasks and work assigned or commissioned by the State for the economic group or holding company;

n) Establishing and connecting the entire network of information for subsidiaries and associated companies within the economic group or holding company;

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

p) Consulting subsidiaries and associated companies in carrying out common activities;

q) Organizing the implementation of supervision, regulation, and coordination between departments within the parent company;

r) Other activities appropriate to the characteristics of each economic group or holding company, relevant laws, the Articles of Association of the parent company, and the Articles of Association of subsidiaries and associated companies within the economic group or holding company.

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

5. Coordination and guidance within economic groups and corporations must be consistent with legal provisions; the Articles of Association of subsidiaries and associated companies; the rights of the owner at the parent company or agreements between the parent company and subsidiaries and associated companies; the position of the parent company in each coordinated activity with subsidiaries and associated companies.

In cases where the parent company abuses its position, intervenes beyond the authority of the owner, member, shareholder, or contrary to the agreements and arrangements among members of the economic group or corporation, thereby harming the interests of member enterprises, related parties, the parent company and those related must bear responsibility as stipulated in Clauses 3, 4, 5, and 6 of Article 147 of the Enterprise Law and other relevant legal provisions.

Article 15. Responsibilities of the Parent Company in Managing and Operating Economic Groups and Corporations

1. Shall be responsible before the owner for ensuring the main business objectives and other objectives set by the owner. Subject to supervision by the owner regarding the investment portfolio and projects invested in the financial, banking, insurance, securities, real estate sectors (except for economic groups and corporations operating in these sectors).

2. Manage the investment portfolio at the parent company to ensure the conditions for investment and industry structure as prescribed in Article 17 of this Decree; monitor and supervise the investment portfolio of the parent company at subsidiaries; monitor and supervise the business activities of subsidiaries.

3. Provide information and report on the contents prescribed in Articles 37, 38, and 39 of this Decree.

4. Establish an organization to provide services for member enterprises within the economic group and corporation.

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

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

7. Develop and implement a system for evaluating the performance of authorized representatives at member enterprises in accordance with the law.

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

a) Standards for experience and management qualifications;

b) Methods and procedures for selection (including competitive examinations), appointment of leadership positions under the authority of the parent company; selection and nomination for competent authorities to choose and appoint leadership positions of the parent company; selection and nomination for enterprises with capital from the parent company to elect to the Board of Directors, Board of Members of such enterprises; selection (including competitive examinations), appointment of capital representatives of the parent company at other enterprises;

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

d) Principles and methods for competitive remuneration and bonuses;

đ) Sanctions for violations.

9. Guide subsidiaries to establish a unified management and accounting system for centralized funds.

Article 16. Management and operation within economic groups and corporations through investment and association forms

Members of economic groups and corporations may use the following forms to ensure the connection between member enterprises in internal management and operation of economic groups and corporations:

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

2. Agreement on internal credit mechanisms of economic groups and corporations; credit guarantee mechanisms; formation of centralized funds not contrary to legal provisions.

3. Organizing meetings or consultations:

a) Between managers and operators at the parent company and authorized representatives at member enterprises to set directions, regulate, and coordinate activities stipulated in Clause 3, Article 14 of this Decree and implement important strategic and directional contents of economic groups and corporations;

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

4. Transfer of authorized representatives who are leading cadres among subsidiary companies.

Article 17. Provisions on restrictions on investment and business fields in economic groups and corporations

1. Controlled enterprises shall not contribute capital or purchase shares of controlling enterprises within the same economic group or corporation. Controlled enterprises within the same economic group or corporation shall not contribute capital or purchase shares to own each other's cross-shareholdings.

2. The parent company operating under the form of a single-member limited liability company owned by the State shall carry out capital investment outside according to the Government's regulations on state capital investment in enterprises and financial management for enterprises with 100% state shareholding.

3. The parent company and member enterprises of economic groups and corporations shall register main business fields and related business fields according to this Decree and relevant laws, subject to supervision by the owner regarding investment decisions, investment ratio, and investment effectiveness in main business fields and related business fields. Parent companies and member enterprises in economic groups and corporations shall not engage in unrelated business fields.

The representative of the State owner approves or delegates the authorized representative at the enterprise to exercise the rights of a controlling shareholder for:

- Voting to approve decisions on conducting main business fields;

- Deciding on adjustments or changes to main business fields;

- Supervising the conduct of related business fields.

Section 2

FUNCTIONS, RIGHTS, DUTIES, MANAGEMENT ORGANIZATION OF THE PARENT COMPANY AS A SINGLE-MEMBER LIMITED LIABILITY COMPANY OWNED BY THE STATE

RESPONSIBILITIES OF A SINGLE-MEMBER LIMITED LIABILITY COMPANY OWNED BY THE STATE

Article 18. Functions, management organization, and operations of the parent company

1. The parent company directly engages in production and business activities and financial investment in other enterprises or only performs the function of financial investment in other enterprises.

2. The management organization and operations of the parent company in economic groups and corporations specified in Clause 2, Article 7 of Decree No. 99/2012/NĐ-CP shall be carried out according to: Articles of Association issued by the Government; Financial Management Regulations approved by competent state agencies and relevant laws.

3. The management organization and operations of the parent company in corporations not specified in Clause 2, Article 7 of Decree No. 99/2012/NĐ-CP shall be carried out according to: Articles of Association approved by the Ministry managing the sector, People's Committee of the province; Financial Management Regulations approved by competent state agencies and relevant laws.

Article 19. Rights, Obligations, and Management Structure of the Parent Company

1. The parent company shall exercise rights and fulfill obligations as prescribed in the Enterprise Law.

2. The parent company's management structure includes the Board of Members, General Director, Supervisor, and supporting staff. The duties, powers, and operational mechanisms of the Board of Members, Supervisor, General Director, Deputy General Directors, Chief Accountant, and supporting staff are governed by the Enterprise Law and Articles 20, 21, 22, 23, 24, 25, 26, and 27 of this Decree.

The Prime Minister decides on the management structure for parent companies operating in special sectors.

Remuneration, salaries, and other benefits for members of the Board of Members, General Director, and Supervisor are regulated by labor laws and salary regulations.

Article 20. Rights and Responsibilities of the Board of Members

The Board of Members represents the direct ownership at the parent company and has the rights and responsibilities stipulated in Article 14 of Decree No. 99/2012/ND-CP.

Article 21. Members of the Board of Members

1. Members of the Board of Members of the parent company include the Chairman, specialized members, and non-specialized members. The term of office for members of the Board of Members does not exceed five (05) years, and members may be reappointed.

2. For parent companies within economic groups and corporations specified in Clause 2, Article 7 of Decree No. 99/2012/ND-CP, the number of Board of Members members shall not exceed seven (07) people, including a maximum of one (01) member involved in managing the parent company. In exceptional cases requiring more than seven (07) Board of Members members, the Minister of the relevant sector must report to the Prime Minister for consideration and decision.

3. For parent companies not covered by Clause 2, Article 7 of Decree No. 99/2012/ND-CP, the number of Board of Members members shall not exceed five (05) people, including a maximum of one (01) member involved in managing the parent company. In exceptional cases requiring more than five (05) Board of Members members, the Minister of the relevant sector and the Chairman of the People's Committee of the province must report to the Prime Minister for consideration and approval.

4. Members of the Board of Members of the parent company must meet the following basic criteria:

a) Reside permanently in Vietnam. The Chairman of the Board of Members must be a Vietnamese citizen;

b) Hold a bachelor's degree and possess business and management capabilities. The Chairman of the Board of Members must have at least three (03) years of experience in managing and operating enterprises in the main business sector of the parent company;

c) Be in good health, have good moral character, be honest, incorruptible, understand the law, and have a sense of compliance with the law;

d) Not be a state administrative official or a political organization leader or hold management positions in affiliated enterprises;

đ) Not be prohibited from assuming managerial or executive positions in enterprises according to Points b, c, đ, e, g of Clause 2, Article 13 of the Enterprise Law;

e) Other criteria prescribed in the Charter of the parent company.

5. Members of the Board of Members shall be relieved of their positions and replaced in the following circumstances:

a) Violating the law to the extent of being prosecuted or other circumstances leading to relief and replacement as prescribed in the Charter of the parent company; in such cases, the Board of Members and the Supervisor have the right to request the owner's representative body to supplement or replace the Board of Members member;

b) Lacking the capability and qualifications to perform assigned tasks; losing or having restricted civil capacity;

c) Resigning;

d) Upon a decision to transfer or assign different work;

đ) Being dishonest in exercising authority or abusing position and authority for personal gain or for others;

e) When the company fails to complete assigned tasks or targets without providing acceptable reasons and obtaining owner approval;

g) Other cases decided by the owner in accordance with the provisions of the Charter of the parent company.

Article 22. Chairman of the Board of Members and the Supporting Machinery of the Board of Members

1. The Chairman of the Board of Members shall not concurrently hold the position of General Director of the parent company. The Charter of the parent company shall stipulate that either the Chairman of the Board of Members or the General Director shall be the legal representative of the parent company.

2. The Chairman of the Board of Members shall perform the rights and duties prescribed in Clause 2 of Article 49 of the Enterprise Law and other rights and duties prescribed in the Charter of the parent company; he/she shall be responsible for explaining and shall bear responsibility before the owner for delays or failure to sign decisions of the Board of Members.

3. Based on the requirements and specific characteristics of the parent company and upon approval from the competent ministry, the Board of Members of the parent company within the economic group may establish advisory boards or certain advisory committees headed by members of the Board of Members:

a) Financial Committee with the duty to assist the Board of Members in determining long-term and medium-term financial goals and indicators; financial management principles and mechanisms to be implemented throughout the economic group; reviewing contracts, investment projects, and other financial matters within the decision-making authority of the Board of Members;

b) Human Resources, Salary, and Bonus Committee with the duty to develop regulations and standards for recruitment, utilization, and management of human resources and labor throughout the economic group; selecting and nominating senior personnel; salaries, remuneration, and bonuses for key personnel in the economic group, and other human resources, salary, and bonus matters within the decision-making authority of the Board of Members;

c) Audit and Supervision Committee with the duty to conduct inspections and supervision over resource mobilization, utilization, and distribution activities within the economic group; monitoring compliance with accounting procedures and implementation of Board of Members' decisions regarding accounting, auditing, and finance;

d) Other committees (if any).

The operating funds of the Committees specified in Clause 3 of this Article shall be sourced from enterprises in accordance with guidelines issued by the Ministry of Finance.

Article 23. Inspector

The criteria, conditions, operational regime, tasks, powers, and obligations of Inspectors shall be governed by the Operating Regulations of Inspectors of State-owned Limited Liability Companies with 100% Capital Contribution issued by the Prime Minister.

Article 24. General Director

1. The General Director shall manage the daily operations of the company in accordance with objectives, plans, and resolutions and decisions of the Board of Members consistent with the Charter of the parent company; he/she shall be responsible to the Board of Members and under the law for the performance of assigned rights and duties.

2. The appointment, reappointment, removal, signing of contracts, termination of contracts, rewards, and disciplinary actions of the General Director shall be carried out in accordance with Decree No. 99/2012/ND-CP and relevant laws. The Charter of the parent company shall specify the criteria and conditions for the General Director. The term of office of the General Director shall not exceed five (05) years.

3. The General Director shall have the duties and powers prescribed in Article 70 of the Enterprise Law and the following duties and powers concerning member enterprises:

a) Develop business cooperation plans between member enterprises for submission to the Board of Members; organize the implementation of joint business plans and investment plans among member enterprises;

b) Inspect units within the enterprise group to ensure compliance with internal standards, quotas, and unit prices;

c) Propose to the Board of Members to appoint representatives authorized by the parent company at other enterprises.

4. The General Director shall fulfill the obligations prescribed in Article 72 of the Enterprise Law and other obligations prescribed in the Charter of the parent company and signed contracts.

5. The General Director may 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;

c) Other cases as provided for in Clause 6 of this Article.

6. The General Director shall be removed or have his/her contract terminated prematurely in the following cases:

a) Causing the parent company to fail to meet the profit margin targets set for two (02) consecutive years or being in a loss-making state with alternating profits and losses but without improvement, except for losses or reduced profit margins approved by the competent authority; losses due to planned expansion of production and business operations, technological innovation as decided by the Board of Members; losses or reduced profit margins with objective reasons explained and accepted by the competent authority;

b) Causing the parent company to incur losses reaching the level specified in the Charter of the parent company;

c) The parent company entering bankruptcy but failing to file for bankruptcy as required by the law on bankruptcy;

d) Failing to complete assigned tasks or targets; repeatedly violating Board of Members' resolutions and decisions, and the operational regulations of the parent company;

đ) Being dishonest in exercising powers or abusing positions to benefit oneself or others; reporting false financial situations of the parent company;

e) Losing or having civil capacity restricted;

g) Being convicted by a court judgment or decision that has become legally binding.

Article 25. Deputy General Directors, Chief Accountants, and Supporting Staff

1. The Deputy General Director assists the General Director in managing the company according to the division of labor and authorization from the General Director; bears responsibility before the General Director and the law for the tasks assigned or authorized.

2. The Deputy General Director and Chief Accountant are appointed, dismissed, removed from office, contracted, and have their contracts terminated, salaries, and other benefits determined by the Board of Members upon the proposal of the General Director for a term not exceeding five (05) years and may be reappointed or have their contracts renewed.

3. The number of Deputy General Directors shall not exceed five (05) persons. The Board of Members decides on the structure and number of Deputy General Directors based on the scale and characteristics of the parent company's production and business operations during its operation. In cases requiring more than five (05) Deputy General Directors, the Board of Members proposes to the Sector Management Agency (for parent companies within economic groups, holding companies specified in Clause 2, Article 7 of Decree No. 99/2012/NĐ-CP and holding companies under Ministries) or the People's Committee of the province (for parent companies within holding companies under provincial People's Committees) to report to the Prime Minister for consideration and approval.

4. The Chief Accountant is responsible for organizing the accounting work of the company; assisting the General Director in financial oversight and maximizing financial resources at the company in accordance with laws on finance and accounting; having rights and obligations as prescribed by laws on finance and accounting; bearing responsibility before the General Director and the law for the tasks assigned or authorized. The criteria for the Chief Accountant are stipulated in the Accounting Law and other relevant laws.

5. The supporting staff includes the Office and specialized departments with advisory and support functions for the Board of Members and the General Director in management and operational activities.

Article 26. Relationship between the Board of Members and the General Director in Management and Operation

1. When implementing resolutions and decisions of the Board of Members, if issues detrimental to the parent company and the entire economic group or holding company are discovered, the General Director must report to the Board of Members for review and adjustment of the resolution or decision. The Board of Members must consider the General Director's proposal. If the Board of Members does not adjust the resolution or decision, the General Director still has to implement it but has the right to appeal to the owner.

2. Within fifteen (15) days from the end of each month, quarter, or year, the General Director must submit a written report on the company's operational situation and projected plans for the next period to the Board of Members.

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

4. The General Director may be invited to attend meetings of the Board of Members and has the right to express opinions but does not have the right to vote unless the General Director is a member of the Board of Members.

Article 27. Relationship between the Inspector and the Board of Members and General Director

The relationship between the Inspector and the Board of Members and the General Director shall be governed by the Operating Regulations of the Inspector of a Limited Liability Company with One Member Holding 100% Capital Contribution issued by the Prime Minister.

Section 3

RELATIONSHIP BETWEEN THE PARENT COMPANY AND ENTERPRISES PARTICIPATING IN AN ECONOMIC GROUP OR HOLDING COMPANY

PARTICIPATE IN ECONOMIC GROUPS, HOLDING COMPANIES

Article 28. General coordination relationships within economic groups and holding companies

The parent company, subsidiary companies, and associated companies participating in economic groups and holding companies shall implement general coordination relationships as follows:

1. Establishing common operating regulations based on agreements between the parent company and participating enterprises in the economic group or holding company.

2. The parent company, based on its rights and responsibilities stipulated by law, acts as the central entity to implement part or all of the following general coordination activities among enterprises within the economic group or holding company:

a) Coordination in planning and managing coordinated business operations;

b) Directing the division of business fields and industries for member enterprises in the economic group or holding company;

c) Organizing financial, accounting, and statistical work;

d) Forming, managing, and utilizing centralized funds of the economic group or holding company;

đ) Managing and using land and mineral resources;

e) Labor, salary, health, training, and human resource development work;

g) Safety, disaster prevention, and environmental protection work;

h) Scientific and technological application work;

i) Naming units within the economic group or holding company; using the name and brand of the economic group or holding company;

k) Administrative and external relations work of the economic group or holding company;

l) Managing commendation, cultural, sports, and social work;

m) Other contents agreed upon by member enterprises in the economic group or holding company.

Article 29. Relationship between the parent company and the second-level enterprise owned 100% by the parent company

1. The Board of Members or the Board of Directors of the parent company shall exercise the rights and obligations of the owner of the parent company towards the second-level enterprise owned 100% by the parent company according to relevant laws and the Articles of Association of that enterprise.

2. In relation to the second-level enterprise owned 100% by the parent company, the General Director of the parent company has the responsibility to:

a) Receive, review, and evaluate reports from the Chairman of the Board of Members or the Chairman of the second-level enterprise to submit to the Board of Members or the Board of Directors for consideration, approval, or decision;

b) Organize the monitoring, urging, supervising the Board of Members or the Chairman of the second-level enterprise to implement decisions of the Board of Members or the Board of Directors of the parent company regarding the second-level enterprise, including the implementation of coordinated production and business plans.

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

a) Shall be assigned by the parent company to execute production and business contracts based on economic contracts; provide information and benefit from services and advantages from the common activities of the economic group or holding company as prescribed by this Decree, agreed upon with member enterprises of the economic group or holding company, and relevant laws;

b) Shall fulfill the general agreements of the economic group or holding company; economic contract commitments with the parent company and member enterprises of the economic group or holding company; implement lawful decisions within the owner's authority over the enterprise; shall participate in coordinated business plans with the parent company and member enterprises of the economic group or holding company.

Article 30. Relations between the parent company and the second-tier enterprise with controlling shares or capital contributions from the parent company

1. The parent company shall have the rights and obligations of shareholders, contributing members, and joint venture parties of the second-tier enterprise in accordance with the laws and the charter of that enterprise. The Board of Directors or the Board of Management of the parent company shall directly perform the following rights and obligations:

a) Exercise the rights and obligations of shareholders, contributing members, and joint venture parties through the authorized representative at the enterprise in accordance with the law and the enterprise's charter;

b) Appoint, change, dismiss, reward, discipline, decide on allowances and benefits for the authorized representative at the enterprise;

c) Require the authorized representative to report periodically or unexpectedly on the financial situation, business results, and other contents of the enterprise;

d) Assign tasks and require the authorized representative to seek opinions on important matters before voting at the enterprise; report on the use of shareholder rights and controlling member contributions to serve the development orientation and objectives of the parent company and the entire economic group or corporation;

đ) Receive income and bear risks from the portion of capital contributed by the parent company in the enterprise;

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

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

2. In relation to the second-tier enterprises holding controlling shares or capital contributions, the General Director of the parent company shall be responsible for:

a) Receiving, inspecting, and appraising the reports submitted by the authorized representative to the Board of Directors or the Board of Management for consideration, approval, or decision;

b) Organizing the monitoring, inspection, urging, and supervision of the authorized representative to implement the decisions of the Board of Directors or the Board of Management of the parent company regarding the second-tier enterprise;

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

3. The second-tier enterprises holding controlling shares or capital contributions from the parent company shall have the rights and obligations as prescribed by law and the following provisions:

a) Have the right to participate in the coordinated business plan based on economic contracts with the parent company and member enterprises; be assigned by the parent company to execute production and business contracts based on economic contracts with the parent company; receive information and benefit from services and advantages from the common activities of the economic group or corporation in accordance with this Decree, agreements with member enterprises, and relevant laws;

b) Have the obligation to implement the general agreements of the economic group or corporation; contractual commitments with the parent company and member enterprises; implement lawful decisions of the parent company in exercising control over the enterprise.

Article 31. Relations between the parent company and associated companies

1. The parent company shall exercise its rights and obligations towards associated companies in accordance with the laws, the associated company's charter, and the association agreement.

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

Article 32. Subordinate units of the parent company

Subordinate units of the parent company (including dependent accounting units and public service units) implement the system of business operation, accounting, organization, and personnel management of the parent company according to the regulations set forth in the Charter on the Operation of Subordinate Units established by the General Director of the parent company and submitted for approval by the Board of Members or the Board of Directors. The parent company is responsible for financial obligations arising from the commitments of subordinate units.

Section 4

FUNCTION, RIGHTS, DUTIES, MANAGEMENT ORGANIZATION OF THE PARENT COMPANY

IS A JOINT STOCK ENTERPRISE WITH STATE DOMINANT SHARE CAPITAL

Article 33. Functions, management organization, and activities of the parent company

1. The parent company carries out direct production and business operations and financial investment in other enterprises, or only engages in financial investment in other enterprises.

2. The management organization and activities of the parent company are governed by the Company Charter approved by the Shareholders' Meeting (for joint stock companies with state dominant shares) or by the Board of Members (for limited liability companies with two or more members and state dominant capital contributions).

Article 34. Rights, duties, organizational structure of the management of the parent company, management, operation, and relationships within economic groups and holding companies

1. The parent company has rights and duties as prescribed by the Enterprise Law and related laws.

2. The organizational structure of the management of the parent company is regulated by the Enterprise Law and related laws corresponding to the form of the parent company being a joint stock company or a limited liability company with two or more members.

3. Management and operation of economic groups and holding companies are regulated in Section 1, Chapter III of this Decree. Relationships between the parent company and participating enterprises in economic groups and holding companies are regulated in Section 3, Chapter III of this Decree.

Chapter IV

MANAGEMENT AND SUPERVISION OF ECONOMIC GROUPS, HOLDING COMPANIES

Article 35. State owner and state owner's representative at the parent company

1. The Government uniformly performs the function of state owner at the parent company operating under the form of a limited liability company with one member owned by the State and the state share capital at the parent company operating under the form of a joint stock company or a limited liability company with two or more members having state dominant shares.

The division and delegation of functions of the state owner at the parent company within economic groups and holding companies are regulated by Decree No. 99/2012/NĐ-CP.

2. The following agencies, organizations, and individuals are appointed as representatives of the state owner at the parent company:

a) For the parent company in an economic group operating under the form of a limited liability company with one member owned by the State: the Prime Minister, the Ministry managing the industry, and the person appointed as a member of the Board of Members of the parent company;

b) For the parent company in an economic group operating under the form of a joint stock company or a limited liability company with two or more members where the State holds dominant shares: the Prime Minister, the Ministry managing the industry, and the person authorized to exercise the rights, responsibilities, and obligations of shareholders or capital contributors at the parent company;

c) For the parent company in a holding company operating under the form of a limited liability company with one member owned by the State: the Ministry managing the industry or the People's Committee of the province and the person authorized to exercise the rights, responsibilities, and obligations of the state owner at the parent company;

d) For the parent company in a holding company operating under the form of a joint stock company or a limited liability company with two or more members where the State holds dominant shares: the Ministry managing the industry, the People's Committee of the province, or the State Capital Investment Corporation and the person authorized to exercise the rights, responsibilities, and obligations of shareholders or capital contributors at the parent company.

Article 36. State Owner's Management over Economic Groups and Corporations

1. The state owner shall manage economic groups and corporations through the parent company within such groups and corporations.

2. The state owner's management over the parent company within economic groups and corporations shall be carried out through issuing decisions, assigning tasks, delegating decision-making authority, and inspecting the implementation of the state owner's decisions at the parent company within economic groups and corporations in accordance with Decree No. 99/2012/NĐ-CP.

Article 37. State Owner's Oversight over Economic Groups and Corporations

1. The principle for the state owner's oversight over economic groups and corporations is to conduct oversight through the parent company within such groups and corporations.

2. The contents of oversight include:

a) Business operation oversight, including: Business objectives, directions, and strategies of economic groups and corporations; investment portfolios, main business sectors, related sectors; investments in areas, industries, regions, and projects with risk; public service tasks, macroeconomic regulation support, social security assurance; development strategies, investment plans, financial plans, production and business plans of the parent company; results of implementing targets and tasks assigned by the state owner;

b) Organizational and personnel work oversight, including: Implementation of the state owner's decisions on establishment, restructuring, and cessation of operations under the form of economic groups and corporations; changes in ownership structure of subsidiary companies that affect the controlling rights of the parent company; implementation of the parent company's charter; evaluation of performance and salary and bonus systems for members of the Board of Directors, Supervisory Board members, and General Managers of the parent company; appointments, reappointments, and dismissals by the Board of Directors for Deputy General Managers and Chief Accountants of the parent company; implementation of policies for employees; compliance with other state owner's decisions and relevant provisions in the charter;

c) Financial oversight: Preservation and development of equity capital at the parent company; production and business activity conditions and results; capital raising and utilization situations; bond and stock issuance situations (if applicable); return on state-owned capital; return on revenue; return on total assets; dividends distributed to the state; investment situations within and outside the enterprise; debt and payment capacity situations; investment and business efficiency; salary costs; registered capital, adjustments to registered capital, changes in registered capital structure; projects exceeding the level delegated to the Board of Directors or the Board of Management and other necessary financial indicators.

3. Assignment and delegation of responsibilities for overseeing the contents stipulated in Clause 2 of this Article for economic groups and corporations with parent companies operating as single-member limited liability companies owned by the state:

a) The sector management ministry shall oversee the parent company within economic groups and corporations specified in Clause 2 of Article 7 of Decree No. 99/2012/NĐ-CP and corporations under its jurisdiction regarding the following contents: Main business sectors and related sectors; assessment of the main business sector structure and related sectors; management, use, preservation, and development of capital; supervision, inspection, and assessment of debts and other property obligations; implementation of strategies and plans; implementation of recruitment, salary, and bonus systems; assessment of the fulfillment of assigned business goals, tasks, and results, business efficiency; assessment of the Chairman and members of the Board of Directors, Supervisory Board members, General Manager, Deputy General Manager, and Chief Accountant in management and operation;

b) The provincial People's Committee shall oversee corporations under its jurisdiction regarding the following contents: Main business sectors and related sectors; assessment of the main business sector structure and related sectors; management, use, preservation, and development of capital; supervision, inspection, and assessment of debts and other property obligations; implementation of strategies and plans; implementation of recruitment, salary, and bonus systems; assessment of the fulfillment of assigned business goals, tasks, and results, business efficiency; assessment of the Chairman and members of the Board of Directors, Supervisory Board members, General Manager, Deputy General Manager, and Chief Accountant in management and operation;

c) The Ministry of Finance shall oversee and evaluate financial activities; supervise stock issuance, registered capital adjustments of the parent company and member enterprises; salary costs; supervise borrowing for investment in finance, banking, real estate, and securities sectors; supervise capital transfer, investment, and resource allocation within economic groups and corporations and between internal and external entities; monitor consolidated financial reports of economic groups and corporations; annually compile and report to the Government on business efficiency and public service task fulfillment, financial status; debt and other property obligation situations of economic groups and corporations nationwide; take the lead and coordinate with sector management ministries and provincial People's Committees to implement regular supervision and inspections according to regulations on managing, using, preserving, and developing capital.

d) The Ministry of Planning and Investment shall monitor and supervise the implementation of the project to establish economic groups and holding companies; supervise and evaluate the implementation of development strategies of economic groups and holding companies; periodically compile and report to the Government on the achievement of objectives, tasks, and business sectors of all economic groups and holding companies nationwide; take the lead and coordinate with the relevant sectoral ministries and provincial People's Committees to conduct regular annual supervision and inspection of the implementation of strategies, production plans, business plans, and five-year investment development plans of economic groups and holding companies; provide opinions to the relevant sectoral ministries and provincial People's Committees regarding the acceptance of subsidiaries and associated companies of economic groups and holding companies;

đ) The Ministry of Home Affairs shall take the lead and coordinate with the relevant sectoral ministries and provincial People's Committees to conduct supervision and inspection of compliance with Party and State regulations on cadre work in economic groups and holding companies;

e) The Ministry of Labor, Invalids, and Social Affairs shall take the lead and coordinate with the relevant sectoral ministries and provincial People's Committees to conduct regular supervision and inspection of the implementation of recruitment systems, salaries, and bonuses in economic groups and holding companies;

4. Allocation and delegation of responsibilities for the supervision content prescribed in Clause 2 of this Article for economic groups and holding companies with parent companies operating under the form of joint-stock companies or limited liability companies with controlling shares or contributions from the State:

a) Relevant sectoral ministries shall require authorized representatives to report on the implementation of compliance with laws; management, use, preservation, and development of state capital; implementation of strategies and plans; evaluation of the achievement of objectives, tasks, assigned business sectors, and operational results and effectiveness of the parent company and the entire economic group in the main business areas under their jurisdiction, as well as the parent company and the entire holding company under their ministry;

b) Provincial People's Committees shall require authorized representatives to report on the implementation of compliance with laws; management, use, preservation, and development of state capital; implementation of strategies and plans; evaluation of the achievement of objectives, tasks, assigned business sectors, and operational results and effectiveness of the parent company and the entire holding company under their committee;

c) The Ministry of Finance shall take the lead and coordinate with relevant sectoral ministries and provincial People's Committees to require authorized representatives to report on the implementation of management, use, preservation, and development of state capital invested in enterprises within the country;

d) The Ministry of Planning and Investment shall take the lead and coordinate with relevant sectoral ministries and provincial People's Committees to require authorized representatives to report on the implementation of strategies, production and business plans, and five-year investment development plans;

đ) The Ministry of Home Affairs shall take the lead and coordinate with relevant sectoral ministries and provincial People's Committees to require authorized representatives to report on the implementation of compliance with Party and State regulations on cadre work in economic groups and holding companies;

e) The Ministry of Labor, Invalids, and Social Affairs shall take the lead and coordinate with relevant sectoral ministries and provincial People's Committees to require authorized representatives to report on the implementation of recruitment systems, salaries, and bonuses in economic groups and holding companies;

5. Annually, the ministries, agencies, and organizations specified in Clauses 3 and 4 of this Article shall report and be responsible before the Prime Minister for the current status and results of supervision and evaluation; simultaneously send copies to the Ministry of Planning and Investment;

The Ministry of Planning and Investment shall consolidate and report to the Prime Minister on the results of supervision by the owner as prescribed in this Article nationwide.

Article 38. Methods and Bases for Managing and Supervising Economic Groups and State-Owned Corporations

1. The supervision of economic groups and state-owned corporations shall be carried out through the following methods:

a) Direct method:

- Through the inspection, supervision, and evaluation activities of the agencies specified in Clause 3, Article 37 of this Decree.

- Through the assessment of the agency representing the owner on the results of the operations of the economic group and state-owned corporation and the positions appointed, contracted by these agencies.

The agency representing the owner establishes an Advisory Board to evaluate state-owned enterprises, including experts from state agencies, institutes, and universities with extensive knowledge about the industry and field of operation of the economic group and state-owned corporation to provide advice before making decisions to ensure objectivity in evaluating economic groups, state-owned corporations, and positions under management. The agency representing the owner stipulates the operational regulations of the Advisory Board to evaluate state-owned enterprises.

- Through conducting audits at the parent company and subsidiaries, associated companies.

- Through the request of the agency representing the owner for the Board of Members or the authorized representative to report directly.

b) Indirect method:

- Through the reporting system of the Board of Members or the authorized representative at the parent company.

- Through the implementation of regular and extraordinary reporting systems of the parent company.

2. Bases for supervising economic groups and state-owned corporations:

a) Regulations of the owner and relevant state management agencies;

b) Charter of organization and operation and Financial Management Regulation of the parent company;

c) Plans and results of production, business, and development investment; annual evaluation and ranking criteria for economic groups and state-owned corporations; activity evaluation criteria for the Board of Members or Board of Directors, General Director, Deputy General Directors, Chief Accountant of the parent company as prescribed by the Government;

d) Annual financial reports of the parent company and consolidated financial reports of the entire economic group and state-owned corporation that have been audited and approved by the Board of Members or Board of Directors; quarterly financial reports, periodic business reports, and other extraordinary reports as required by the owner;

đ) Results of inspections, audits conducted by competent authorities at enterprises;

e) Other related information and documents as prescribed by law.

3. The results of supervision and evaluation serve as the basis for determining salaries, bonuses, appointments, reappointments, dismissals, renewing contracts, terminating contracts, rewarding, disciplining, and handling responsibilities of the Chairman, members of the Board of Members or Board of Directors, General Director, Deputy General Directors, Chief Accountant of the parent company.

The Chairman, members of the Board of Members or Board of Directors, General Director, Deputy General Directors, Chief Accountant of the parent company who commit violations or cause damage to the interests of the parent company, the entire economic group and state-owned corporation, the owner, members, shareholders, creditors of the enterprise, or others shall be subject to disciplinary action or criminal responsibility pursuit and must compensate (if applicable) according to the provisions of the law depending on the degree and nature of the violation.

Article 39. Mechanism for Disclosure and Transparency of Information for Economic Groups and State Corporations

1. Economic groups and state corporations must implement the disclosure and transparency of key information related to their operations in accordance with the laws on enterprises concerning the disclosure and transparency of information. The contents of the information that need to be disclosed and made transparent include:

a) For the parent company in economic groups and state corporations: Implement the disclosure of information as prescribed in Chapter IV of the Financial Supervision Regulation and Performance Evaluation and the disclosure of financial information for state-owned enterprises and enterprises with state capital issued together with Decree No. 61/2013/NĐ-CP dated June 25, 2013 of the Government, and the following information:

- Details of tasks assigned by the state owner in various forms.

- Detailed information about ownership structure and assets.

- List of investment projects, investment forms, total budget for investment and progress of ongoing investment projects.

- Large-scale transactions and loans.

b) For the entire economic group or state corporation:

- Consolidated financial report for six (06) months. Consolidated annual financial report of the entire economic group or state corporation which has been audited.

- Structure, operation, changes in ownership capital at companies; regarding the management system of the parent company and subsidiaries.

- Annual report of the entire economic group or state corporation.

- Report on corporate governance of the entire economic group or state corporation for six (06) months and annually.

2. Economic groups and state corporations shall report periodically and ad hoc to the representative body of the owner, including:

- Process of using capital, land, natural resources, and other resources at the parent company and throughout the economic group or state corporation.

- Process of organizing and implementing and results of implementing long-term strategies and plans of the parent company; decisions on annual plans of the parent company approved by the owner; decisions on long-term strategies, plans, industries, and business sectors of subsidiaries wholly owned by the parent company.

- Process and results of implementing investment projects within the planning and long-term development plan of the economic group or state corporation approved by the Prime Minister.

- Process and results of implementing organizational management, business organization, staffing, and use of the management system, internal management regulations of the company, labor planning, establishment of branches, and representative offices of the parent company.

- Process of appointing, reappointing, dismissing, demoting, rewarding, disciplining, signing contracts, and terminating contracts with the General Director after approval by the Prime Minister; decision on the salary of the General Director.

- Results after using post-tax profits or handling losses during the business process.

- Process and results of supervising the Board of Members, Board of Management, and Auditor of limited liability companies wholly owned by the parent company.

- Other reporting contents required by a business enterprise to report to the owner as stipulated in the Enterprise Law and guiding documents.

3. Means and forms of publishing information include: Annual reports, Corporate Governance Reports, published on the websites of economic groups and state corporations. Contents of information disclosed and made transparent under Clause 1 of this Article, after being approved by the owner, must be posted on the website of the Ministry of Planning and Investment (www.business.gov.vn) within thirty (30) days from the date of approval. The format of the public information report is prescribed by the Ministry of Planning and Investment.

4. Types of information to be published and time limits for publication:

a) Annual financial report, including the annual financial report of the parent company and the consolidated annual financial report of the entire economic group or state corporation.

The deadline for publishing the annual financial report information shall not exceed ninety (90) days after the end of the fiscal year;

b) Annual report: The deadline for publishing the annual report information shall not exceed twenty (20) days from the date of publishing the annual financial report information;

c) Corporate governance situation report: Annually and semi-annually, the parent company shall publish information on the corporate governance situation of the parent company and the entire economic group or state corporation. The deadline for reporting and publishing the corporate governance report semi-annually and annually shall be no later than thirty (30) days from the end of the reporting period;

d) Ad hoc information and other information as prescribed by law.

5. For economic groups and state corporations with parent companies operating in the form of joint-stock companies, in addition to implementing the provisions of Clauses 1, 2, 3, and 4 of this Article, they must also disclose information according to the guidelines for disclosing information on the securities market.

6. Economic groups and state corporations are responsible for the accuracy, truthfulness, and consistency of the disclosed information.

Chapter V

IMPLEMENTING PROVISIONS

Article 40. Effective Date

1. This Decree takes effect from September 1, 2014, and replaces Decree No. 101/2009/NĐ-CP dated November 5, 2009 of the Government on piloting the establishment of state economic groups; Decree No. 111/2007/NĐ-CP dated June 26, 2007 of the Government on the organization and management of state corporations and the transformation of state corporations, independent state companies, and state-owned parent companies operating under the parent company-subcompany model under the Enterprise Law.

2. Economic groups and state corporations established before the effective date of this Decree:

a) Must meet the criteria for establishing economic groups and state corporations except for the registered capital criteria stipulated in Article 9 of this Decree, within three (03) years from the date this Decree takes effect, they must supplement the registered capital as prescribed in this Decree. In case of failure to supplement the registered capital, after the above period, they will immediately have to convert into state corporations or groups of companies corresponding to the actual conditions of the enterprise.

b) Failing to meet the conditions for establishment prescribed in this Decree, they shall be required to reorganize into a holding company or a group of companies corresponding to the actual conditions of the enterprise within two (02) years from the date this Decree takes effect;

c) Having more than three (03) levels of enterprises, within two (02) years from the date this Decree takes effect, they must restructure and arrange the subsidiaries of the third-level enterprises currently existing. The representative body of the owner has the responsibility to monitor and supervise the restructuring and arrangement process of these economic groups and holding companies.

3. Parent companies in economic groups and holding companies that have the number of Supervisors, members of the Board of Members, Deputy General Managers not in compliance with the provisions of this Decree shall be required to supplement or transfer them within one (01) year from the date this Decree takes effect.

4. Economic groups and holding companies not falling under the scope of application of this Decree may apply relevant provisions of this Decree to organize and operate.

Article 41. Responsibilities for Implementation and Enforcement

1. The Ministries of Planning and Investment, Finance, Justice, Labor - Invalids and Social Affairs, Home Affairs 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.

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

3. Ministers, heads of ministerial-level agencies, heads of agencies under the Government, Chairmen of Provincial People's Committees directly under the Central Government, Chairmen of the Board of Members or Chairmen of the Board of Directors, General Directors of economic groups and holding companies are responsible for enforcing this Decree./.