Circular No. 47/2007/TT-BTC date May 15, 2007 of the Ministry of Finance guiding the transfer of the right to represent the owner of state investment capital portions at enterprises to the state capital investment and trading corporation

CIRCULAR

GUIDING THE TRANSFER OF THE RIGHT TO REPRESENT THE OWNER OF STATE INVESTMENT CAPITAL PORTIONS AT ENTERPRISES TO THE STATE CAPITAL INVESTMENT AND TRADING CORPORATION

Pursuant to the Government's Decree No. 77/2003/ND-CP of July 1, 2003, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Government's Decree No. 199/2004/ND-CP of December 3, 2004, promulgating the Regulation on financial management of state companies and management of state capital invested in other enterprises;

Pursuant to the Prime Minister's Decision No. 151/2005/QD-TTg of June 20, 2005, establishing the State Capital Investment and Trading Corporation;

Pursuant to the Prime Minister's Decision No.152/2005/QD-TTg of June 20, 2005, approving the organization and operation charter of the State Capital Investment and Trading Corporation;

The Ministry of Finance guides the transfer of the right to represent the owner of state investment capital portions at enterprises to the State Capital Investment and Trading Corporation as follows:

1. Subjects of application:

This Circular guides the transfer of the right to represent the owner of state investment capital portions at enterprises from ministries, ministerial-level agencies, government-attached agencies (hereinafter referred to as ministries and branches) and People's Committees of provinces and centrally run cities (hereinafter referred to as provincial-level People's Committees) to the State Capital Investment and Trading Corporation (hereinafter referred to as the Corporation).

2. Scope of the transfer of the right to represent the owner of state investment capital portions at enterprises:

2.1. The right to represent the owner of state investment capital portions at one-member state limited liability companies which have been transformed from independent state companies.

2.2. The right to represent the owner of state investment capital portions at limited liability companies with two or more members which have been transformed from independent state companies.

2.3. The right to represent the owner of state investment capital portions at joint-stock companies which have been transformed from independent state companies or newly established.

2.4. Other cases as decided by the Prime Minister.

3. Transfer principles:

3.1. Only the right to represent the owner of state capital portions at enterprises shall be transferred. The organization, management and business activities of other enterprises as well as the state management of other enterprises' activities by ministries, branches and provincial-level People's Committees shall be carried out according to current laws.

3.2. The transfer shall be carried out between ministries, branches, provincial-level People's Committees and the Corporation, in which:

a/ The transferor is the minister, the head of a ministerial-level agency or government-attached agency, the president of a provincial-level People's Committee or a person who is authorized in writing.

b/ The transferee is the president of the Board of Directors of the Corporation or the person who is authorized in writing.

3.3. The transfer shall be organized at each enterprise having state capital to be transferred and a complete dossier with sufficient enclosed documents as prescribed by law and guided in this Circular.

4. Transferred value:

4.1. For joint-stock companies, it is the value of State-owned shares (calculated according to their par value) in the enterprise and amounts of money to be recovered by the State.

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

5. Transfer dossiers:

5.1. A transfer dossier shall be compiled for each enterprise, consisting of:

a/ A report on the value of state capital (or State-owned shares) invested in the enterprise;

b/ A report on the amounts of money to be recovered from the enterprise by the State;

c/ A report on the financial status and business activities of the enterprise;

d/ A list of representatives of state capital portions at the enterprise and their relevant personal details;

e/ A written record of the transfer of the right to represent the owner of state capital portions at the enterprise from a ministry, branch or provincial-level People's Committee to the Corporation.

5.2. Legally valid documents of the company enclosed with the dossier, including:

a/ A copy of the decision on the establishment of the company or the decision on the transformation of the state enterprise.

b/ A copy of the decision or written record, made by a competent state agency, on the re-determined value of state capital portions at the time the join-stock company or limited liability company is granted a business registration certificate, if any. The transfer shall still be carried out, if any of these documents is unavailable, and it be added after the written record of the transfer is signed.

c/ A written certification, made by the enterprise's Board of Directors, of the amount of state capital and the number of State-owned shares at the enterprise and the State's stocks or shareholder certificate or book (for joint-stock companies); and the State's certificate of capital contribution or member book (for limited liability companies with two or more members).

d/ A copy of the first business registration certificate and a copy of the latest business registration certificate (if any).

e/ The list of the company's Board of Directors' members or president and director or general director.

f/ A copy of the current organization and operation charter of the enterprise.

g/ The enterprise's financial settlement statement of the latest quarter.

5.3. A transfer dossier shall be made in four sets to be sent to concerned parties after the transfer record is signed, including:

a/ 01 set to be sent to the concerned ministry, branch or provincial-level People's Committee (for conducting the transfer).

b/ 01 set to be sent to the Corporation (for receiving the transfer).

c/ 01 set to be sent to the Ministry of Finance (for supervision).

d/ 01 set to be kept at the enterprise.

6. Grounds for identifying transfer figures:

6.1. For state enterprises which have been completely transformed (have officially switched to operate after the joint-stock company or limited liability company model), the grounds for identifying transfer figures are those shown in the latest financial statement of the enterprise.

6.2. For enterprises undergoing transformation specified at Point 8 of this Circular: As these enterprises have not yet been officially transformed into joint-stock companies, transfer figures are determined on the basis of figures on state capital stated in decisions approving plans on the transformation of state enterprises into joint-stock companies, issued by ministries, branches or provincial-level People's Committees, and the results of the initial public offerings conducted by the enterprises. By the time the enterprises are officially transformed into joint-stock companies, the agencies competent to decide on enterprises' value shall assume the prime responsibility for, and coordinate with the Corporation in, inspecting and handling financial matters arising from the time of valuation to the time the joint-stock companies are granted business registration certificates in order to re-determine the value of state capital portions and adjust the official transfer figures according to regulations.

6.3. After the transfer is completed, if there is any change in figures, the Corporation shall adjust the official transfer figures and notify the readjusted figures to the Ministry of Finance and the transferor.

7. Transfer process:

7.1. On the basis of the transfer dossier compiled by the representative under this Circular, the Finance-Accounting Department or the Finance-Planning Department of the concerned ministry or branch (for central enterprises) or the provincial-level Finance Service (for local enterprises) shall examine the dossier and figures and submit a written record of the transfer of the right to represent the owner of the state capital portion at the enterprise to the leadership of the concerned ministry, branch, provincial-level People's Committee or authorized person for signing.

7.2. After signing the transfer record, the concerned ministry, branch and provincial-level People's Committee shall send the transfer record (enclosed with the transfer dossier) to the Corporation for signing.

7.3. After the transfer is completed, the Corporation shall send one copy of the transfer written record to the transferor, one copy to the Ministry of Finance and one copy to the enterprise concerned.

7.4. When it does not agree to the dossier or figures, within five working days after receiving the transfer record, the Corporation shall send its written opinions to the concerned ministry, branch or provincial-level People's Committee for supplementation of the dossier or adjustment of the official transfer figures and, at the same time, notify the Ministry of Finance thereof for monitoring and supervision.

7.5. In case of necessity, the Corporation may reach agreement with ministries, branches and provincial-level People's Committees on the transfer record and figures.

8. Transfer of the right to represent the owner of state capital portions at state enterprises undergoing equitization

8.1. The transfer of the right to represent the owner of state capital portions at state enterprises undergoing equitization shall be carried out concurrently with the transformation of state enterprises.

For transformed enterprises subject to transfer of the right to represent the owner of state capital portions to the Corporation: The concerned ministry, branch or provincial-level People's Committee, after issuing a decision approving the plan on the transformation of the enterprise and completing the enterprise's initial public offerings, shall sent a written notice (enclosed with the transfer dossier specified at Point 8.2 of this Circular) to the Corporation for acceptance of the transfer and exercise of the rights of the representative of the owner of state capital portions before the first shareholders' assembly is organized, such as appointing a representative of state capital portions at the enterprise, receiving dossiers and documents on registration of shareholders' rights, participating in handling post-equitization issues, etc.

8.2. For enterprises undergoing transformation, the transfer dossier comprises:

a/ The decision on equitization of the state enterprise, issued by a competent agency;

b/ The dossier on valuation of the equitized enterprise.

c/ The decision publicizing the enterprise's value and the decision approving the equitization plan for transformation of the state enterprise into a joint-stock company.

d/ The results of initial public offerings.

e/ A list of member units and the company's capital amounts contributed to each member unit (for cases of transforming the parent company in the parent company-subsidiary company model or equitizing the whole corporation).

f/ The draft organization and operation charter of the joint-stock company (if any).

g/ Other documents (if any).

9. Organization of implementation:

9.1. The Ministry of Finance shall:

a/ Supervise the process of transferring the right to represent the owner of state capital portions from ministries, branches and provincial-level People's Committees to the Corporation.

b/ Coordinate with ministries, branches, provincial-level People's Committees and the Corporation in solving remaining issues related to the right to represent the owner of state capital portions at enterprises.

9.2. Ministries, branches and provincial-level People's Committees shall:

a/ Complete in the second quarter of 2007 the transfer of state capital portions at enterprises which were equitized and transformed in 2006 backwards in accordance with the Government's instruction at Item b, Point 2, Section III of Resolution No. 03/2007/NQ-CP of January 19, 2007, on major solutions for directing and administering the realization of the 2007 socio-economic plan and state budget. For enterprises subject to transfer and completely equitized and transformed in the period from January 1, 2007, to the effective date of this Circular, the transfer must be completed within one month after the effective date of this Circular.

b/ Provide guidance for representatives of state capital portions to solve remaining issues related to the right to represent the owner before the transfer and compile the transfer dossiers according to this Circular.

c/ Examine transfer dossiers and figures, make and sign transfer records before sending them to the Corporation for signing under the guidance in this Circular.

d/ Assume the prime responsibility for, and coordinate with the Ministry of Finance and the Corporation in, solving issues related to the right to represent the owner of state capital portions at enterprises arising before the time of signing of transfer records.

e/ Perform the state management of enterprises in which the right to represent the owner of state capital has been transferred. The contents of state management are specified in Articles 161, 162, 164 and 165 of the 2005 Enterprise Law.

f/ Providing benefits according to regulations and arrange jobs for full-time or part-time representatives who no longer work as representatives of state capital portions at transformed enterprises.

g/ Coordinate with, and propose the Corporation to, appoint persons to replace representatives of the owner of state capital portions at the request of the Corporation.

h/ Pending the transfer, ministries, branches and provincial-level People's Committees may not sell part of or adjust the charter capital of enterprises.

i/ Eligible enterprises which fail to carry out the transfer according to the provisions of this Circular shall take responsibility before the Prime Minister for the delay and related financial losses.

9.3. Representatives of state capital portions at enterprises shall:

a/ Make reports and take responsibility for the accuracy of reported figures, such as the report on the value of state capital (or shares) at the enterprise; the report on the value of amounts of money to be recovered by the State; the report on financial status and business activities; the report on the representative of state capital, and compile transfer dossiers under the guidance in this Circular.

b/ Coordinate with enterprises in carrying out procedures for re-registration of State ownership of shares or the contribution of capital by ministries, branches or provincial-level People's Committees to the Corporation.

c/ To urge enterprises to remit to the Corporation proceeds from the equitization and dividends on state capital portions at enterprises in which the right to represent the owner of state capital portions has been transferred.

d/ After the transfer is completed, representatives of state capital portions at enterprises who have been appointed by ministries, branches or provincial-level People's Committees shall continue performing their functions, tasks, and powers according to current laws and the Corporation's regulations until the Corporation issues decisions to replace them.

e/ If these representatives cannot perform their assigned tasks and powers, competent agencies shall consider and appoint other representatives to perform the tasks. If they deliberately delay the implementation of jobs related to the transfer, they shall pay compensation for arising losses (if any).

9.4. The Corporation shall:

a/ Receive and exercise the rights and perform the obligations to represent the owner of state capital portions at enterprises from the time of receiving the transfer.

b/ Assume the prime responsibility for, and coordinate with ministries, branches and provincial-level People's Committees in, appointing representatives of state capital portions when necessary.

c/ Exercise the rights of the creditor in supervising and urging enterprises in which the right to represent the owner of state capital portions has been transferred to the Corporation to remit to the Corporation proceeds from equitization and dividends on state capital portions (under the Finance Ministry's authorization) and finalize the collection and remittance of these amounts with the Finance Ministry.

d/ Send quarterly or irregular reports, at the Finance Ministry's request, to the Ministry of Finance on:

- The situation of the transfer of the right to represent the owner of state capital from ministries, branches, provincial-level People's Committees to the Corporation.

- The sale of part of state capital and the investment of capital in enterprises.

- The preparation for the listing of enterprises on the securities market.

- The collection of debts owned in the sale of state shares and dividends on state capital portions arising before the time of transferring the right to represent the owner of state capital to the Corporation.

- The plan on organization of the transfer of the right to represent the owner of state capital for the subsequent quarter.

e/ Annually, report to the Prime Minister and the Ministry of Finance on the transfer of the right to represent the owner of state capital; results of production and business activities and realization of long-term and medium-term plans already approved by competent authorities.

10. Implementation provisions:

This Circular takes effect 15 days after its publication in "CONG BAO" and replaces the Finance Ministry's Circular No. 81/2005/TT-BTC of September 19, 2005, guiding the transfer of the right to represent the owner of state capital portions at enterprises to the State Capital Trading and Investment Corporation.

Problems arising in the course of implementation should be reported to the Ministry of Finance for guidance and settlement.