Socialist Republic of Vietnam

Vietnam may lift the restriction in the volumes of shares that foreign investors are allowed to hold in Vietnamese joint-stock companies, said the Ministry of Finance Monday.
In a news conference Dec. 27 to introduce a decree on the equitization of state-owned enterprises, Ms. Le Thi Bang Tam, Deputy Finance Minister said the ministry is suggesting that no limits are set on foreign entrepreneurs’ right to buy shares.

So far, Vietnamese law permits a foreign investor to hold only a maximum of 30 per cent of shares in a Vietnamese company.

Unbiased treatment

The government has earlier assigned the Finance Ministry to suggest a way to increase volume of shares that foreign investors hold in Vietnamese companies, according to Ms. Tam.

“The ministry is now planning to submit to the government unlimited sales of shares to foreign investors,” she said, because “there are many areas where restrictions are unnecessary.”

“The government has stipulated clearly on which enterprises it totally owns, or which companies it controls with more than 52 per cent of shares. Thus, other companies that are not in such category should have the go-ahead to sell unlimited shares to domestic and foreign buyers,” said Ms. Tam.

“Also, the government aims to sell shares to investors who have strong financial capacities,” she said.

Furthermore, in the integration process, Vietnam has pledged non-discrimination treatment among every type of business, she noted.

Fairer equitization

In the decree, equitized firms are required to sell shares at auctions. The sale of shares will be carried out at the company if the total value of shares is less than one billion VND.

If the value of the shares is between one and 10 billion VND, auctions will take place at an intermediary financial institution. But if the value is more than 10 billion VND, the sale will be implemented at a stock exchange center.

The selling system will help prevent company shares from being sold to its own staff and minimize losses to the state budget, said Hoang Nguyen Hoc, a finance ministry high-ranking official.

The decree also regulates that an investor who is deemed a strategic investor of a joint-stock firm is able to buy 20 per cent of company shares at preferential prices - 20 per cent lower than the auction’s average final prices.

Meanwhile, company staff can buy a maximum of 100 shares per year at prices 40 per cent lower than final auction prices.

The finance ministry is to select several eligible state-owned enterprises to carry out sales of shares at the stock exchange centers in Hanoi and Ho Chi Minh City, according to Mr. Hoc.

Reported by Manh Quan – Translated by Hieu Trung.
Story from Thanh Nien News
Published: 28 December, 2004, 00:09:42 (GMT+7)
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