Decree No. 116/2015/ND-CP dated November 11, 2015 of the Government amending, supplementing a number of articles of the Decree No. 59/2011/ND-CP dated July 18, 2015 of the Government on transformation of enterprises with 100% state capital into joint-stock companies

DECREE

Amending and supplementing a number of articles of the Government’s Decree No. 59/2011/ND-CP of July 18, 2011, on transformation of wholly state-owned enterprises into joint-stock companies[1]

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

Pursuant to the June 29, 2006 Law on Securities;

Pursuant to the November 26, 2014 Law on Enterprises;

Pursuant to the November 26, 2014 Law on Management and Use of State Budget Invested in Production and Business at Enterprises;

At the proposal of the Minister of Finance,

The Government promulgates the Decree amending and supplementing a number of articles of the Government’s Decree No. 59/2011/ND-CP of July 18, 2011, on transformation of wholly state-owned enterprises into joint-stock companies.

Article 1. To amend and supplement a number of articles of the Government’s Decree No. 59/2011/ND-CP of July 18, 2011, on transformation of wholly state-owned enterprises into joint-stock companies as follows:

1. To amend and supplement Clause 2 of Article 12 as follows:

“2. Agencies competent to decide on equitization plans shall select equitization consultancy organizations in accordance with law. For state economic groups, state corporations and a number of enterprises operating in specific fields (such as insurance, banking, telecommunications, aviation, coal mining, petroleum exploitation or mining of other rare and precious minerals), upon equitization, if their equitization plans are to be approved by the Prime Minister, ministers, heads of ministerial-level agencies, heads of government-attached agencies or chairpersons of provincial-level People’s Committees shall select equitization consultancy organizations (to conduct enterprise valuation or elaborate equitization plans)”.

2. To amend and supplement Clause 1, Article 17 as follows:

“1. Provisions for inventory price decrease, financial investment loss, bad debts and warranty for products, goods and construction or installation works; exchange rate differences used to offset losses under current regulations; any remaining amounts shall be included into the value of state capital portions at equitized enterprises.

Particularly, from the time an equitized enterprise is valuated to the time it is officially transformed into a joint stock company, the provision for warranty for products, goods and construction or installation works shall be deducted according to signed contracts (for signed contracts under which the warranty has not yet expired) and retained at the joint-stock company for performance of warranty for products, goods and construction or installation works under contracts. The equitized enterprise shall make up a detailed list of products, goods and works of each type and enclose such list with its equitization dossier. Upon expiration of the warranty for products, goods and construction or installation works, if the provision has not yet been used up, the joint stock company shall remit the remainder to the Enterprise Reorganization and Development Support Fund within 30 days from the date of expiration of the warranty under contracts.

In case the equitized enterprise fails to fully and promptly remit such money amount to the Enterprise Reorganization and Development Support Fund, it shall additionally pay the interest calculated based on the late-paid amount and late payment period at the interest rate which is most recently announced by the State Bank of Vietnam; and be subject to coercive measures provided in the Prime Minister’s Decision No. 21/2012/QD-TTg of May 10, 2012, promulgating the Regulation on management and use of the Enterprise Reorganization and Development Support Fund.”

3. To amend and supplement Clause 2 of Article 21 as follows:

“2. Within 60 working days after obtaining an enterprise registration certificate for the first time, the equitized enterprise shall complete the elaboration of a financial statement at the time of enterprise registration, have this financial statement audited, request the tax office to examine its tax settlement, conduct the settlement to determine the value of the state capital portion at the time of official transformation into a joint stock company and identify financial problems to be further settled.”

4. To amend and supplement Clause 3 of Article 22 as follows:

“3. The agency competent to decide on the equitization plan shall select a valuation consultancy organization to provide enterprise valuation consultancy services according to the following principles:

a/ For a valuation consultancy bidding package valued at less than VND 3 billion, the agency competent to decide on the equitization plan may apply the contractor appointment method to select a valuation consultancy organization from those on the list announced by the Ministry of Finance. A bidding shall be organized to select an organization under the bidding law if necessity.

b/ For consultancy bidding packages other than those prescribed at Point a, the agency competent to decide on the equitization plan shall organize a bidding to select an organization under regulations.”

5. To amend and supplement Point d, Clause 1 of Article 33 as follows:

“d/ If the value of long-term investment of an equitized enterprise in another enterprise is valuated and re-determined to be lower than its book value, the value of such long-term investment shall be the re-determined actual value.”

6. To amend and supplement Clause 2, Article 33 as follows:

“2. The value of the capital amount contributed by an equitized enterprise to a joint stock company already listed or registered for trading on the securities market shall be determined on the basis of the closing price of its stocks traded on the securities market at the time closest to the time of enterprise valuation. In case the joint stock company has its stocks registered for trading on the Upcom market but no transactions has been made within 30 days prior to the time of enterprise valuation, the value of the joint stock company’s stocks shall be determined according to Clause 5, Article 1; and Points a, b and c, Clause 1, Article 33 of the Government’s Decree No. 59/2011/ND-CP of July 18, 2011. For the value of the capital amount contributed to a joint stock company not yet listed or registered for trading on the securities market, the enterprise equitization steering committee shall consider and submit valuation results of the consultancy agency to the agency competent to decide on the enterprise value for decision.”

7. To amend and supplement Point b, Clause 2 of Article 36 as follows:

“b/ Shares to be sold to strategic investors and other investors.

For large-sized enterprises with a state capital portion of over VND 500 billion operating in specific fields or sectors (such as insurance, banking, telecommunications, aviation, coal mining, petroleum exploitation or mining of other rare and precious minerals) and parent companies of state economic groups or state corporations, the percentage of shares auctioned for sale to investors shall be considered and decided by the Prime Minister or agencies authorized by the Prime Minister.”

8. To annul Point b, Clause 3 of Article 36.

9. To amend and supplement Point c, Clause 2, Article 37 as follows:

“c/ The agency competent to decide on and approve the equitization plan shall select a stock exchange or hire an intermediary financial institution to conduct an auction.  For state economic groups, state corporations and a number of enterprises operating in specific fields (such as insurance, banking, telecommunications, aviation, coal mining, petroleum exploitation or mining of other rare and precious minerals),  upon equitization, if their equitization plans are to be approved by the Prime Minister, ministers, heads of ministerial-level agencies and government-attached agencies and chairpersons of provincial-level People’s Committees shall select a stock exchange or hire an intermediary financial institution to conduct an auction.”

10. To add Clause 8 to Article 48 as follows:

“8. An equitized enterprise that has carried out necessary procedures under the approved equitization plan but fails to conduct an IPO within 90 days after obtaining the decision approving the equitization plan may sell shares to its employees or trade union organization at the price equaling 60% of the reserve price stated in the approved equitization plan.

The difference between the selling price offered to employees and trade union organizations (if any) and the par value of shares shall be subtracted into the value of the state capital portion at the time the enterprise is officially transformed into a joint stock company.”

Article 2. Organization of implementation

1. This Decree takes effect on November 11, 2015.

2. To annul Clause 2, Article 1 of the Government’s Decree No. 189/2013/ND-CP of November 20, 2013.

Article 3. Implementation responsibilities

1. The Minister of Finance shall inspect and supervise the implementation of this Decree.

2. Ministers, heads of ministerial-level agencies or government-attached agencies, chairpersons of provincial-level People’s Committees, Members’ Councils of state economic groups and state corporations established under decisions of the Prime Minister shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN TAN DUNG