Decree No. 140/2020/ND-CP amending the Decree No. 126/2017/ND-CP

DECREE

On amending and supplementing a number of articles of the Decree No. 126/2017/ND-CP dated November 16, 2017 of the Government on transformation of state enterprises and single member limited liability companies with 100% state enterprise-invested charter capital into joint stock companies; the Decree No. 91/2015/ND-CP dated October 13, 2015 of the Government on investment of state capital in enterprises and management and use of capital and assets at enterprises and the Decree No. 32/2018/ND-CP dated March 08, 2018 of the Government on amending and supplementing a number of Articles of the Decree No. 91/2015/ND-CP.

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Pursuant to the Law on Government organization dated June 19, 2015; Law on  amending and supplementing a number of Articles of the Law on organization of the Government and the law on Organization of Local Administration dated November 22, 2019;

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

Pursuant to the Law on Enterprises dated November 26, 2014;

Pursuant to the Law on Investment dated November 26, 2014;

Pursuant to the Law on Public Investment dated June 13, 2019 ;

Pursuant to the Securities Law dated June 29, 2006 and the Law Amending and Supplementing a Number of Articles of the Securities Law dated November 24, 2010 ;

Pursuant to the Land Law dated November 29, 2013;

Upon the request of the Minister of Finance;

The Government hereby promulgates the Decree on amending and supplementing a number of articles of the Decree No. 126/2017/ND-CP dated November 16, 2017 of the Government on transformation of state enterprises and single member limited liability companies with 100% state enterprise-invested charter capital into joint stock companies; the Decree No. 91/2015/ND-CP dated October 13, 2015 of the Government on investment of state capital in enterprises and management and use of capital and assets at enterprises and the Decree No. 32/2018/ND-CP dated March 08, 2018 of the Government on amending and supplementing a number of Articles of the Decree No. 91/2015/ND-CP.

Article 1. To amend and supplement a number of articles of the Decree No. 126/2017/ND-CP dated November 16, 2017 of the Government on transformation of state enterprises and single member limited liability companies with 100% state enterprise-invested charter capital into joint stock companies (hereinafter referred to as the Decree No. 126/2017/ND-CP) as follows:

1. To amend and Clause 2 Article 2 as follows:

“2. Enterprises with 100% state owned charter capital including:

a) Single member limited liability companies with 100% charter capital held by the State, which are parent companies of economic groups, parent companies of state corporations, or parent companies in parent company-subsidiary groups;

b) Independent single member limited liability companies with 100% state owned charter capital;

2. To supplement and amend Article 4 as follows:

a) To amend and supplement Clause 1 as follows:

“1. Enterprises referred to in Clauses 2 and 3, Article 2 of this Decree may be equitized when meeting the following conditions:

a) They are other than those in which the State needs to own 100% of charter capital. The list of enterprises with 100% of charter capital to be owned by the State shall be decided by the Prime Minister for each period;

b) If the actual value of an enterprise, after its financial matters are settled and it is reevaluated under Chapters II and III of this Decree, is equal to or higher than its liabilities;

c) For enterprises subject to the reorganization and handling of real estate in accordance with the law on management and use of public property, there must be plan for reorganizing and handling house and land under the scope of reorganization and handling of houses and land approved by the competent authorities in accordance with the law on management and use of public property.

For agro-forestry enterprises which the State holds 100% of charter capital, besides the plans for reorganizing and handling the area of non-agricultural land approved by competent authorities in accordance with the law on management and use of public property, there must be plans for land use of agricultural land approved by competent authorities as prescribed in  the Decree No. 118/2014/ND-CP dated December 17, 2014 of the Government on restructuring, developing and improving the agriculture and forestry companies and other amending, supplementing and replacing documents.”

b) To amend and supplement Clause 2 as follows:

“2. If the actual value of an enterprise, after its financial matters are settled and it is reevaluated under Chapters II and III of this Decree, is lower than its liabilities, the owner representing agency shall direct the enterprise to coordinate with the Vietnam Debt and Asset Trading Corporation and its creditors in working out a feasible and effective debt purchase and sale plan to restructure the enterprise or conduct other methods of transformation prescribed by law.”

3. To amend and supplement Clause 6 as follows:

a) To supplement in to Clause 2 the following contents:

“Foreign investors are allowed to make deposits and escrow by credit transfer of foreign currencies when participating in the auction to buy shares or capital of enterprises of which 100% charter capital is held by the State in accordance with the law of Vietnam on foreign exchange and instructions of the State Bank of Vietnam.”

b) To amend point c, Clause 3 as follows:

“c) On the basis of the charter capital size, characteristics of business lines and development and expansion requirements of an enterprise, the enterprise equitization steering committee (below referred to as the steering committee) shall propose the agency competent to decide on approving the equitization plan shall decide whether or not to carry on the initial offering of shares to strategic investors. In case of initial offering of shares to strategic investors, the agency competent to decide on approving the equitization plan shall decide criteria for selection of strategic investors and the rate of shares to be sold to strategic investors in the equitization plan of the enterprise.

The selection of strategic investors in an equitized enterprise must follow the steps specified in Appendix I to this Decree, ensuring the selection of strategic investors and organization of their registration to purchase shares be completed before the time of disclosure of information on the initial public offering (IPO).”

4. To add Clause 5, Article 8 as follows:

“5. In case the enterprise must be reevaluated the enterprise’s valuation, postpone the enterprise’s equitization or terminate the enterprise’s equitization according to the Decision of the Prime Minister, the owner representing agency shall consider and decide on handling the expenses for equitization (which accompanied by adequate reasonable and valid supporting documents) which shall be accounted into enterprise’s expenses and shall not be deducted when determine enterprise’s income subjected to enterprise income tax.”

5. To amend Clause 2, Article 11 as follows:

“2. While compiling a dossier of initial public offering, an equitized enterprise shall also prepare a deposit registration dossier and a registration dossier for trading on the securities market. The procedure forlisting on the securities market shall be conducted after the equitized enterprise transformed to joint stock companies and satisfied listing criteria as described by the securities law.”

6. To amend and supplement Article 12 as follows:

a) To amend and supplement Clause 1 as follows:

“1. Equitized enterprises may hire consultancy organizations to carry out enterprise valuation, determine reserve prices and elaborate plans on equitization and initial offering of shares. Owner representing agencies shall hold the responsibility to select the consultancy organizations or may assign to the steering committee to carry the whole or a part of project owner or bid solicitor’s responsibility in accordance with law provisions on bidding when hiring consultancy organizations (except for the responsibility pf approving contractor selection result).”

b) To amend and supplement Clause 3 as follows:

“3. Owner representing agencies shall decide to select consultancy organizations that satisfy all the conditions specified in Clauses 5 and 6 of this Article to valuate enterprises on the following principles:

a) For consultancy packages of a value not exceeding VND 500 million, the owner representing agency shall decide to apply the method of contractor appointment to select enterprise valuation consultancy organizations;

b) For consultancy packages of a value from VND 500 million to VND 3 billion, after the expiration of the time limit for open bidding as prescribed and there is only one organization registering to provide enterprise valuation consultancy services, the owner representing agency shall decide to apply the method of contractor appointment to select enterprise valuation consultancy organizations;

b) For consultancy packages other than those prescribed at Points a and b of this Clause, the owner representing agency shall decide to hold a bidding to select an enterprise valuation consultancy unit in accordance with the bidding law.”

c) To amend and supplement Point a, Article 5 as follows:

“a) Being an audit firm, a securities company or a price appraisal enterprise lawfully established and operating in Vietnam under the law provisions and be granted the Certificate of eligibility for price appraisal business by the Ministry of Finance as prescribed by the law on price and price appraisal.”

7. To supplement into Clause 2, Article 13 the following contents:

“For some specialized assets of equitized enterprises, which access to assets for inventory and assessment of the actual current state of assets does not guarantee the feasibility and efficiency, the enterprise shall make plan for inventory and assessment of the actual current state of this asset to report to owner representing agency for seeking opinion of relevant state specialized and technical management agencies. Within the time limit of 20 working days from the receiving the proposal of the agency representing the owner, the relevant state specialized and technical management agencies must reply by written document on the plan for inventory and assessment of the actual current state of enterprise’s asset. Pursuant to the state specialized and technical management perspective, the owner representing agencies shall decide appropriate inventory plan and take responsibility on the inventory result.”

8. To amend and supplement Clause 4, Article 14 as follows:

“4. Welfare facilities, including crèches, kindergartens, infirmaries and other welfare assets invested with the reward fund or welfare fund, shall be transferred to the trade union of the joint stock company for management and use to serve its employees as prescribed by law on land and other relevant law. In case the trade union and employees of the joint stock company has no need to use these assets, based on the opinions of the employees and the trade union shall authorize the enterprise to liquidate or sells these property in accordance with the relevant laws and the current land law. Income from asset liquidation, transfer, after deducting related expenses and tax obligations (if any), will be returned to the Bonus and Welfare Fund.

Houses of cadres, employees and workers built with the enterprise’s welfare fund, including those built with allocated state budget funds, if the enterprise has no need to make use of shall be transferred to the local housing and land administration agency for management.”

9. To amend and supplement Article 15 as follows:

a) To supplement into the first paragraph of Clause 1 the following content:

“For receivables of customers using post paid telecommunications, information technology and television services (both domestic and abroad) arise frequently in large numbers who are customer of the equitized enterprise, to whom the comparison and confirmation of debt with each customer raises a great amount of work, time and costs, the owner representing agency shall decide the comparison and confirmation of debt so as to satisfy the demands of reality (based on accounting records and the information technology system for customer management of equitized enterprises).”

b) To amend Clause 2 as follows:

“2. If there remain some receivable debts with sufficient dossiers not compared and certified yet by the time of valuation of an equitized enterprise, the President or Members’ Council of such enterprise shall clearly explain these debts and identify the responsibility of related collectives and individuals in the completion the comparison of debts before the enterprise is granted a certificate of first-time joint stock enterprise registration (except for the debts which have been recalled by the enterprise accomplished with adequate reasonable and valid supporting documents) and report them to the owner representing agency for consideration and decision on the course of valuation of the enterprise according to their book value; and concurrently specify them in the decision approving the enterprise’s value and equitization plan for this content as the basis for auction of shares.

At the time an equitized enterprise is granted a certificate of first-time joint stock enterprise registration, when making a financial statement for handover from to the joint stock company, if there are still debts for which comparison procedures have been carried out but which have not been compared yet, the President or Members’ Council of such enterprise shall take responsibility to direct the review and determine for categorized into irrecoverable debt and receivables debts for handling as follows:

- For debts which comparison procedures have been carried out but which have not been compared yet and be determined as irrecoverable debt, compensation responsibility of related organizations and individuals shall be considered and settled.  The residual value of these debts (after subtracting the compensations of these collectives and individuals, and provisions for bad debts, if any) shall be accounted into expenses of the equitized enterprise and their dossiers shall be transferred to the Vietnam Debt and Asset Trading Corporation for handling under law.

- For other debts which comparison procedures have been carried out but which have not been compared yet, they shall be handover to the joint stock companies for  further monitoring and recovered in accordance with law provisions.”

c) To supplement to Clause 3 the following content:

“For the debts which are not accounted into value of equitized enterprise of commercial banks which the State holds 100% of charter capital and enterprise which the State holds 100% of charter capital operate in telecommunications (including also bad debts already handled with provisions within 5 years preceding the time of valuation of the enterprise), the enterprise shall allowed to remain for further monitoring, managing and recovering. The amount of recovery from these debts, joint stock commercial banks and telecommunications enterprises after equitization are allowed to retain a proportion as prescribed by the Ministry of Finance applicable for the Vietnam Debt and Asset Trading Corporation to cover incurred costs related to debt collection, the rest is paid to the Enterprise Reorganization and Development Support Fund.”

10. To amend and supplement Clause 1, Article 16 as follows:

“1. An equitized enterprise shall compare and certify all their payable debts before the time of its valuation.

If there remain some payable debts with sufficient dossiers not compared and certified yet by the time of valuation of an equitized enterprise, the President or Members’ Council of such enterprise shall clearly explain these debts details and identify the responsibility of related collectives and individuals to complete the comparison of debts before the enterprise is granted a certificate of first-time joint stock enterprise registration and (except for the debts which have been paid for the organizations and individuals by the equitized enterprise accomplished with adequate reasonable and valid supporting documents) report them to the owner representing agency for consideration and decision within enterprise value according to their book value; and concurrently specify them in the decision approving the enterprise’s value and equitization plan as the basis for auction of shares.

At the time an equitized enterprise is granted a certificate of first-time joint stock enterprise registration, when making a financial statement for handover from enterprises with 100% state owned charter capital to the joint stock company, if all comparison procedures for these debts have been completed but their creditors are not identify them yet, the value of these debts shall be recorded as an increase in the state capital. The joint stock company (transformed from an enterprises with 100% state owned charter capital) shall archive the dossiers of these debts, take over and monitor them, pay them when receiving their creditors’ claims, and account the paid amounts into its expenses in the period.

For commercial banks which the State holds 100% of charter capital, inventory and comparison of customers’ deposits, valuable papers (certificates of deposit, treasury bills, promissory notes, bonds) shall based on details of each debt in the accounting books; compare and confirm the deposit balance of customers who are legal entities; savings deposits, personal deposits, valuable papers must be compared with the accounting records kept at the bank and reconciled with customers. At the time the equitized enterprise is granted the certificate of first-time joint stock enterprise registration, when making a financial statement for handover from enterprises with 100% state owned charter capital to the joint stock company, if all comparison procedures for these debts have been completed but their customers are not identify them yet, joint stock commercial banks shall continue to inherit, monitor, manage and fulfill debt repayment obligations at the request of legal creditors in accordance with law provisions.

For deposits, collateral, prepayment of customers using telecommunications, information technology and television services, ensure the provision of intermediary payment services according to the provisions of law which the comparison and confirmation of debt with each customer raises a great amount of work, time and costs, the owner representing agency shall direct the enterprise to report and decide on the comparison and confirmation of debt so as to satisfy the demands of reality and law provisions (based on accounting books and records, contracts to provide telecommunication, information technology, television services, payment intermediary services and information technology system for customer management of equitized enterprises).”

11. To amend Clause 1, Article 22 as follows:

“1. Enterprise valuation consultancy organizations shall select asset method and at least one methods of valuation as prescribed by the law on price and price appraisal to valuate enterprises to submit to the owner representing agency for consideration and decide.”

12. To amend Clause 3, Article 25 as follows:

“3. An enterprise shall be re-valuated if it fails to carry out initial public offering (IPO) of its shares 09 months after the time of announcement of its value, except special cases decided by the Prime Minister on the basis of owner representing agencies’ proposal but must ensure that the IPO time of the enterprise must not exceed 12 months from the time of enterprise value announcement.”

13. To amend Article 27 as follows:

a) To amend Clause 1 as follows:

“1. The total actual value of an equitized enterprise is the re-assessed value of all assets of the enterprise at the time of its valuation, taking into account the enterprise’s profitability.

The actual value of equity of the owner of an equitized enterprise announced in the decision on announcement of enterprise value is the total actual value of an equitized enterprise after subtracted the payable debts, the balance of non-business funds (if any).”

b) To amend Clause 2 as follows:

“2. When equitizing the parent company of a state economic group or corporation or the parent company in a parent company-subsidiary conglomerate, the value of the owner’s capital in the equitized company is the actual total value of the owner’s capital in this parent company.”

c) To amend Clause 5 as follows:

“5. For value of investment capital of the equitized enterprise in joint stock companies stocks an equitized enterprise has received for value of investment capital of the equitized enterprise in joint stock companies by the time of its valuation without having to pay for them, the investment capital value must be re-determined according to the principles prescribed in Article 32 of this Decree, in which the number of shares is the total number of shares that the equitized enterprise owns (including the number of shares received, managed, tracked on the notes to the financial statements) and the number of shares to be received after the time of enterprise valuation according to the Resolution of the General Meeting of Shareholders up to the time of enterprise valuation.”

14. To amend Clause 4, Article 29 as follows:

“4. Re-assessed value of the use rights of allocated land and value of the business advantages of the enterprise at the time of enterprise valuation.”

15. To add Article 30a as follows:

“Article 30a. Land use plan during equitization

1. Land use plan during equitization is a set of proposals on land use form consistent with the local master plan, land use plan, construction planning (if any) on land areas managed and used by the equitized enterprise and single member limited liability company which the equitized enterprise invested 100% charter capital which approved and announced at the time of enterprise evaluation, submit to the competent agencies prescribed in Clause 5 this Article for consideration and approval.

2. Based on plans for reallocation and handling of houses and land in accordance with the law on management and use of public assets, land use plans as prescribed in the Decree No. 118/2014/ND-CP has been approved by the competent authority, the enterprise’s land use needs during equitization and the time of enterprise valuation, the steering committee shall direct the enterprise to establish the land use plan during equitization including the whole land area of equitized enterprise and single member limited liability company which the equitized enterprise invested 100% charter capital which approved and announced at the time of enterprise evaluation (including the land area not subject to reallocation and handling of houses and land in accordance with the law on management and use of public assets and land areas not in the land use plan as prescribed in the Decree No. 118/2014/ND-CP of the Government (if any).

3. The equitized enterprise shall report to the owner representing agency (equitized enterprise prescribed in Clause 3, Article 2 of this Decree shall report to the Members’ Council or the Chairperson of the enterprises with 100% state owned charter capital as prescribed in Clause 2, Article 2 of this Decree), and seek the opinion of the localities (location of the land areas which the enterprise managing and using) about the land use plan during equitization.

4. Within the time limit of 03 months from the receiving date of the owner representing agency as prescribed in Clause 3 of this Article, the People’s Committee of provinces and central affiliated cities (location of the land areas which the enterprise managing and using) shall answer by written document on the plan of land use during equitization.

The People’s Committee of provinces and central affiliated cities (location of the land areas which the enterprise managing and using) shall hold the responsibility on opinion about the land area which enterprise shall continue to use during equitization and specific land price for handover land area in accordance with law provisions on land to serve as a basis for enterprise valuation as prescribed; concurrently to be responsible for directing the conduct of review and handling of responsibilities of organizations and individuals involved in the delay in giving official opinions on land use plans during equitization which leads to reevaluation of enterprise as prescribed in Clause 1, Article 23 of this Decree; the delay in giving official opinions on land use plans of enterprise shall be a criterion to evaluate and classify cadres and civil servants according to the provisions of law on civil servants.

On the basis of the plans for reallocation and handling of houses and land in accordance with the law on management and use of public assets, land use plans as prescribed in the Decree No. 118/2014/ND-CP have been approved by the competent authority; land use demand of the enterprise according to the land use plan during equitization; local planning, land use plan, construction planning (if any), the People’s Committee of provinces and central affiliated cities (location of the land areas which the enterprise managing and using) shall give official opinion on land area which enterprise continue to use during equitization. Official opinion of the People’s Committee of provinces and central affiliated cities (location of the land areas which the enterprise managing and using) shall include the following contents:

- Agree on land use plans upon equitization for the land areas with no changes compared to the plans for reallocation and handling of housing and land approved by competent authorities in accordance with legal regulations on management of public property use and land use plans as prescribed in the Decree No. 118/2014/ND-CP.

- To have comments on the conformity with the local master plans, land use plans, construction plans (if any), the form of land use, the land use purpose of the land areas changes compared to the plan of relocation and handling house, land and land use plan approved as prescribed in the Decree No. 118/2014/ND-CP; land areas are assigned, transferred and leased to enterprise in accordance with law provisions arise after the effective date of approved of relocation and handling house, land and land use plan approved as prescribed in the Decree No. 118/2014/ND-CP to the time of enterprise’s evaluation and land areas which are not objected to the plan of relocation and handling house, land and land use plan in accordance with law provisions on management and use of public property and land area other than those prescribed in the Decree No. 118/2014/ND-CP (if any).

In case the proposed land use plan during equitization is inconsistent with the local master plans, land use plan, construction planning (if any) or is different from the land use purpose according to the approved plan on relocation and handling of house and land in accordance with law provisions on management and use of public property and land use plan as prescribed in the Decree No.118/2014/ND-CP, enterprises must conduct the readjust the land use plan for these land areas accordingly. In case an enterprise does not adjust the land use plan for these land areas, the owner representing agencies shall direct the enterprise to return it to the State in accordance with the law provisions on land for other using purposes. The residual value of the assets on the land area must be returned to the State (if any) the equitized enterprise will hand over to the locality for receiving and management; at the same time, accounting for asset decrease and equity decrease according to the residual value of assets being recorded in the accounting books at the time of enterprise valuation.

- The specific land prices at the time of enterprise valuation shall be as prescribed in Clause 3 and point d, Clause 4, Article 114 of the Land Law for land area handover as prescribed in Clause 1, Article 30 this Decree.

5. Within 01 month from the date of receipt of all locals opinions on the land use plan during equitization as prescribed in Clause 4 of this Article, the owner representing agencies shall decide to approve the plan for land use during equitization of the enterprise and must ensure that the plan is approved before the time of the decision to announce the enterprise value. Specific for enterprise prescribed in Clause 3, Article 2 of this Decree, the Members’ Council or the Chairperson of the enterprises with 100% state owned charter capital as prescribed in Clause 2, Article 2 of this Decree shall approve the land use plan during equitization.

The owner representing agencies or the Members’ Council or the Chairperson of the enterprises with 100% state owned charter capital as prescribed in Clause 2, Article 2 of this Decree shall hold responsibility for directing the conduct of review and handling of responsibilities of organizations and individuals involved in the delay in giving official opinions on land use plans during equitization which leads to reevaluation of enterprise as prescribed in Clause 1, Article 23 this Decree; the delay in giving official opinions on land use plans of enterprise shall be a criterion to evaluate and classify cadres, civil servants and enterprise’s manager according to the provisions of law.

6. Areas of land which the equitized enterprise be assigned, transferred or leased in accordance with law arose from the time of enterprise valuation to the time of first business registration to be transferred to joint stock company, the enterprise shall rearrange and handle in accordance with the law on management and use of public property; concurrently complete the procedure to be assigned, leased and conduct financial duty in accordance with law provisions on land and other related law.

7. The Ministry of Natural Resources and Environment shall give the detail instructions on land use during equitization.”

16. To amend and supplement Article 30 as follows:

a) To amend the first paragraph of Clause 2 as follows:

“2. For remaining land areas (after excluding land areas specified in Clause 1 of this Article) according to the approved land use plan of an equitized enterprise as prescribed in Article 30a of this Decree, enterprise shall lease land for a definite term in accordance with the land law and pay annual land rents.

The equitized enterprise shall pay the land rent in accordance with law provisions on land and shall not account such land lease amount in the enterprise equitization value.”

b) To amend Clause 4 as follows:

“4. After be granted the certificate of first time joint stock enterprise registration, the joint stock companies shall take responsibility to fulfill financial obligations and procedures for land allocation, land lease, issuance of certificates of land use rights, ownership of houses and other land-attached properties in accordance with the current land law.”

17. To supplement to point b, Clause 3, Article 32 the following content:

“Representative of equitized enterprise’s capital share in another enterprise shall reviewe and give opinion on changes in the period in which the enterprise with capital contribution of the equitized enterprise does not prepare its financial statements at the same time of enterprise valuation to report to the owner’s representative agency for consideration and decision on determining the value of the capital contribution of the equitized enterprise in another enterprise.”

18. To amend Clause 3, Article 34 as follows:

“3. At least 01 month before the initial sale of shares, the steering committee shall coordinate with the stock exchange or auction organization in disclosing information at the enterprise, at the auction venue, in the mass media and on the Government Portal.”

19. To amend Article 37 as follows:

“Article 37. Handling of quantities of unsold shares and readjust the charter capital, the charter capital structure according to the result of the sale of shares

1. Based on the equitization plan approved by the competent authority, the steering committee shall sell shares to employees and to organize the trade union in the enterprise before the public auction. The number of shares that employees and trade unions refuse to buy under the equitization plan, the Steering Committee reports the owner’s representative agency to add to the number of shares auctioned to the public.

2. Based on the actual results of selling shares, the steering committee reports to the owner’s representative agency for the decision to readjust the charter capital, the charter capital structure in the approved equitization plan.

In case an enterprise equitizes in the form of selling part of state capital combined with issuing additional shares or selling all state capital combined with issuing additional shares, the number of sold shares is determined as the number of additional shares issued under the approved equitization plan, the remainder is defined as the number of shares sold off state capital, number of shares sold at preference to the subjects specified at points a and c, Clause 1, Article 42 of the Decree No. 126/2017/ND-CP shall be defined as the number of shares sold off state capital.

3. In case there is no investor registering to purchase shares, based on the result of selling shares to employees and the trade union in the enterprise according to the approved equitization plan to carry out procedures to transform the enterprise into a joint stock company and adjust the charter capital, charter capital structure as prescribed in Clause 2 of this Article.

4. In case there is only one investor registering to purchase shares, the steering committee shall agree to sell shares in a lawfully registered quantity to such investor at a price not lower than the reserve price. If such investor refuses to purchase shares, the equitized enterprise shall follow Clause 3 of this Article.

5. In case after holding a public auction, all investors with successful bids refuse to purchase shares, the equitized enterprise shall follow Clause 3 of this Article.

6. In case some shares have been sold at a public auction, the unsold quantity of shares (including the quantity of shares which investors with successful bids refuse to purchase) shall be handled as follows:

a) The steering committee shall inform investors that lawfully participated in the auction (excluding those with successful bids the entire volume registered to buy in the public auction) to sell shares to them by the negotiation method in the exact quantities they registered but not yet purchased and at the prices they offered at the auction on the principle of selecting prices in descending order offered at the auction until the whole quantity of shares put on sale is sold out;

b) If there remain some shares after selling shares to investors by the negotiation method as prescribed at point a, Clause 6 this Article, the steering committee shall inform investors with successful bids the entire volume registered to buy in the public auction (excluding those who refused to purchase shares) to purchase these shares by the negotiation method at the prices offered by each investor at the auction on the principle of selecting negotiated prices in descending order until all remaining shares are sold out;

c) If there remain some shares after implementing the provisions of Points a and b of this Clause, the equitized enterprise shall follow Clause 3 of this Article.”

20. To amend points a and b, Clause 1, Article 39 as follows:

 Within 5 working days from the deadline for payment for shares by investors participating in a public auction, the organization holding the auction shall transfer the proceeds from the initial sale of shares to the equitized enterprise to pay benefits to laid-off employees and equitization expenses according to the estimates stated in the approved equitization plan, leave to the equitized enterprise the value of additional shares calculated at par value and cost (book value of the number of sold shares corresponds to the investment capital of the level I enterprise invested in the level II enterprise when equitizing level II enterprise; the remainder shall be remitted into the Enterprise Reorganization and Development Support Fund;

b) Within 05 working days from the deadline for payment for shares by employees and the trade union participating in a public auction, the steering committee shall take responsibility to transfer proceeds from selling shares to trade unions and employees to the Enterprise Reorganization and Development Support Fund.”

21. To amend and supplement Article 42 as follows:

To add point e to Clause 1, Article 1:

“e) The total value of the shares sold at preferential prices to employees at the maximum par value must not exceed the value of equity according to the accounting books at the time of enterprise valuation.”

d) To add point dd to Clause 2 as follows:

“dd) The number of shares to be purchased by an employee as specified at point a, Clause 2 of this Article is determined according to the period of commitment to continue working up to the full retirement age for the employee under normal working conditions in accordance with the current Labor Code.”

22. To amend Clause 4, Article 45 as follows:

a) To amend and supplement point a as follows:

- To modify the ninth bullet as follows:

“- To review and submit to the owner representing agency for selection equitization consultancy organizations and share auction organizations, for announcement the value of the enterprise, and for approval equitization plans.”

- To  modify the fourteenth bullet as follows

“- To coordinate with related agencies in reviewing and submitting to the owner representing agency for decision on approving the financial statements at the time of officially transformed into a joint stock company; equitization expense finalization; finalization of financial supports for laid-off employees; and finalization of the proceeds from the equitization, and for announcement the actual value of the state capital at the time the joint stock company is granted the initial enterprise registration certificate.”

b)  To amend point b as follows:

“b) The composition of a steering committee shall be decided by the minister, head of the ministerial-level agency or government-attached agency, chairperson of the provincial-level People’s Committee or Members’ Council of the parent company of a state economic group or corporation or of the parent company in a parent company-subsidiary conglomerate.

For units specified at point b, Clause 1 of this Article, the steering committee must be composed of representatives from the Ministry of Finance (if necessary) and the Enterprise Renewal and Development Steering Committee.”

23. To amend Article 47 as follows:

“Equitization shall be carried out in the sequence of specific steps specified in Appendix I attached to the Decree No. 140/2020/ND-CP dated November 30 of the Government).”

24. To amend and supplement Article 48 as follows:

a) To amend Clause 1 as follows:

“1. Enterprises which have obtained decisions announcing their values before January 01, 2018 but have not had their equitization plans approved shall adjust their accounting book value according to the announced enterprise value determination result (except for cases allowed by the competent authority that they do not have to adjust their accounting book value according to the announced enterprise value determination result) and formulate and submit to competent authorities the equitization plan, implement the equitization plan according to the provisions of this Decree. Enterprises prescribed in Clause 1, Article 26 of this Decree shall be subject to state audit and adjust their already announced values if there are any disparities.”

b) To amend Clause 3 as follows:

“3. Enterprises which equitized before the effective date of the Decree No. 59/2011/ND-CP dated July 18, 2017 of the Government have the value of the geographical location advantage of land rental accounted to enterprise’s value and accounting for the increase of the state capital in the enterprise but not fully allocated to production and business costs and not fully deducted from the land rent, the joint stock company shall allocate the geographical location advantage of land rental in expenses for calculating enterprise’s income tax for a period which not exceeding 03 years from the effective date of the Decree No. 140/2020/ND-CP dated November 30 of the Government. The annual allocation does not lead to loss of production and business results of the joint stock company. After 03 years, the joint stock company continues to allocate the residual value to the expenses (if any) and cannot be deducted when determining taxable income of corporate income tax. The joint stock company shall pay land rentals under the land law provisions.”

c) To amend Clause 5 as follows:

“5. Equitized enterprises which have shifted to operate in the form of joint stock company before the effective date of the Decree No. 126/2017/ND-CP (January 01, 2018) are not required to apply this Decree.

For these enterprises, before June 30, 2021, according to the provisions of the law at the time the joint stock company is granted the certificate of first-time joint stock enterprise registration, the agency representing the owner is responsible for presiding over and coordinating with relevant agencies to handle financial matters to decide to approve the financial statements at the time of official transformation into joint stock companies; settlement of equitization costs; settlement of funding to support redundant employees; settle the proceeds from equitization and decide to announce the actual value of state capital at the time the joint stock company is granted the certificate of first-time joint stock enterprise registration and direct the hand-over to joint stock company.

After this time limit, the agency representing the owner is responsible to the Government for the incomplete settlement, the handover to the joint stock company, the delay in finalization handover to the joint stock company of equitized enterprises are considered as a basis for the evaluation and classification of cadres and civil servants in accordance with the law on cadres and civil servants.”

To supplement Clause 8 as follows:

“8. For the equitized enterprises before January 01, 2018, which calculated and determined the value of the business advantages into the enterprise value, the joint stock company shall continue to allocate  value of the business advantages into expenses for calculating corporate income tax for a period not exceeding 03 years from the effective date of the Government’s Decree No. 140/2020/ND-CP dated November 30, 2020.”

dd) To add Clause 9 as follows:

“9. At the effective date of the Government’s Decree No. 140/2020/ND-CP dated November 30, 2020, enterprises have had land use plans approved by competent authorities upon equitization, continue to carry out the next steps of the equitization process and the land use plan once equitization has been approved.”

e) To add Clause 10 as follows:

“10. For shares sold to trade unions in equitized enterprises before January 01, 2018, the trade union of joint stock enterprises holds and does not transfer shares within 03 years from the time the equitized enterprise officially changed to a joint stock company.”

25. To amend and supplement Clause 2, Article 49 as follows:

“2. Single member limited liability companies with 100% charter capital held by political organizations or socio-political organizations, public service providers which are established and operate under the Law on Enterprises may apply the provisions of this Decree to be transformed into joint stock companies.”

26. To issue together with this Decree the Appendix I on the process of converting an enterprise with 100% charter capital owned by the State into joint stock company, which replaces the Appendix II of Decree No. 126/2017/ND-CP.

Article 2. To amend and supplement a number of articles of the Decree No. 91/2015/ND-CP dated October 13, 2015 of the Government on investment of state capital in enterprises and management and use of capital and assets at enterprises (hereinafter referred to as the Decree No. 91/2015/ND-CP) and the Decree No. 32/2018/ND-CP dated August 03, 2018 of the Government on amending and supplementing a number of articles of the Decree No. 91/2015/ND-CP (hereinafter referred to as the Decree No. 32/2018/ND-CP) as follows:

1. To amend Clause 2, Article 2 of the Decree No. 91/2015/ND-CP as follows:

“2. Enterprises with 100% state owned charter capital including:

a) Single member limited liability companies with 100% charter capital held by the State, which are parent companies of state economic groups, parent companies of state corporations, or parent companies in parent company-subsidiary groups;

b) Independent single member limited liability companies with 100% state owned charter capital;”

2. To amend content of Article 4 of the Decree No. 91/2015/ND-CP which supplemented by the second dash in point 8, Clause 1, Article 1 of the Decree No. 32/2018/ND-CP as follows:

“- Lot-type auction refers to an auction of a shares lot or capital lot and attending investor is required to bid for the whole auctioned a shares lot/capital lot. Splitting of total shares or  into lots put up for auction shall be decided by the capital owner.”

3. To amend Article 5 of the Decree No. 91/2015/ND-CP amended and supplemented by Clause 2, Article 1 of the Decree No. 32/2018/ND-CP as follows:

a) Item h of point 1 shall be amended as follows:

“h) Other cases according to the Decision of the Prime Minister on the basis of the proposal of the owner representing agency.”

b) Item e of point 3 shall be amended as follows:

“e) Other cases as decided by the Prime Minister at the request of the owner’s representative agency.”

c) To amend and supplement point 4 as follows:

“4. Enterprises with 100% state owned charter capital applying high technologies, make great investment, operate in banking sector and create momentum for fast development of other sectors and fields and the whole economy.”

4. To supplement in point a, Clause 2, Article 6 of the Decree No. 91/2015/ND-CP as follows:

“For the case of state capital investment to establish an enterprise of which 100% charter capital is held by the State with state budget capital, based on the decision on the establishment of an enterprise by a competent authority, the point owner’s representative shall send a written request for appraisal opinions of the finance agency of the same level to submit to competent authorities according to the decentralization of state budget management and the provisions of law on allocated state budget in the annual State budget expenditure estimate (the content of spending on investment of state capital in enterprises).”

5. To amend Article 9 of the Decree No. 91/2015/ND-CP as follows:

“Article 9. Methods of determining charter capital for operating enterprises with 100% state owned charter capital

1. The charter capital level of an enterprise of which 100% charter capital is held by the State shall be built for a minimum of 03 years from the year of determination of the adjustment of the charter capital approved by the representative agency of the owner in the investment plan to supplement charter capital.

2. The charter capital of enterprises with 100% state owned charter capital which increase shall be determined in correspondence with the source of capital from state budget, the Investment and development fund in the enterprise, the Enterprise Reorganization and Development Support Fund stated in the investment projects to form assets serving production and business activities of the major business line and directly serving the major business line already approved or decided by competent authorities within at least 3 years following the year of charter capital adjustment, including investment projects already approved by competent authorities and being underway;

3. Based on the enterprise’s 5 years production and business strategy and plan approved by the competent authority, the charter capital increase must not exceed 30% of the positive difference between the projected turnover from product, goods and service production and trading in the third year and the turnover from product, goods and service production and trading stated in the enterprise’s audited financial statement of the year preceding the year of charter capital re-determination.

4. Adjustment to increase charter capital shall based on value of assets transferred from other places which originate from state budget investment or receives money under the State’s support policies (support for relocation, reorganization, land and house, investment in technical infrastructure of industrial parks) to implement investment projects on construction, upgrading and improvement of production and business establishments, value difference increased due to revaluation of assets in accordance with the guidelines approved by the Prime Minister.

5. Charter capital of enterprises with 100% state owned charter capital shall be determined as follows:

6. For enterprises operating in specific fields, the determination of the charter capital level for these enterprises shall comply with the provisions of specialized law.”

6. To amend Article 10 of the Decree No. 91/2015/ND-CP and the contents added in Clause 3, Article 1 of the Decree No. 32/2018/ND-CP as follows:

“Article 10. Order and procedures for compiling and approving plans of proposal for charter capital addition for operating enterprises with 100% state owned charter capital

1. The enterprises with 100% state owned charter capital shall compile plans of proposal for charter capital addition with the two following contents: redefined charter capital and supplementary investment source as prescribed in Article 9 of this Decree, sent to the owner’s representative agency. A dossier of investment plan for supplementing charter capital includes:

a) Document to determine the level of charter capital for re-determination and request for additional investment in the enterprise’s charter capital;

b) Report on assessment of financial status and results of production and business activities of the enterprise and explanation of the objectives, necessity and socio-economic efficiency of additional investment in charter capital;

c) Document explaining the method for determining the adjusted charter capital (attached with a copy of the decision approving construction investment projects related to the main business lines of the enterprises with 100% state owned charter capital; copy of the enterprise’s 05 years business and production strategy, plan approved by the competent authority);

d) A copy of the competent authority’s decision announcing the enterprise rankings in the last three years before the year of proposing the charter capital adjustment;

dd) A copy of the audited financial statement in the 03 consecutive years preceding the year of determination of charter capital adjustment.

e) Written explanation of capital sources used for additional investment in charter capital and adjustment of charter capital.

2. Within 15 working days after fully receiving the enterprise’s dossier, the owner representing agency shall examine the dossier as prescribed, appraise the contents of reports, assessments, determine the level of charter capital and explanations related to the source of capital addition in the dossier, and send a written request (enclosed with the dossier compiled according to Clause 1 of this Article) to the finance agency of the same level for coordinated appraisal.

If the enterprise’s dossier fails to meet the prescribed requirements, within 07 working days after the receiving the dossier, the owner representing agency shall request in writing the enterprise to supplement the dossier as prescribed.

3. Within 15 working days from the date of receipt of the written request from the owner’s representative agency (enclosed with the dossier made under the provisions of Clause 1 of this Article), the finance agency of the same level shall give its written opinions on the plan of additional investment in charter capital for the enterprise to be sent to the owner’s representative agency.

If the finance agency of the same level refuses to accept the dossier of proposal for charter capital addition, within 10 working days after receiving the written request and sufficient dossiers of the owner representing agency, it shall send a written reply (clearly stating the reason) to the owner representing agency and the enterprise.

4. Based on the written opinions of the finance agency of the same level, the owner’s representative agency shall direct the enterprises with 100% state owned charter capital to complete the dossier so that the representative agency of the owner shall submit to the Prime Minister for consideration and decision according to his/her competence as prescribed in Article 15 of the Law on Management and Use of State Capital Invested in the Enterprise’s Production and Business, except for the case specified in Clause 6 of this Article, in which:

a) For enterprises established by decision of the Prime Minister, the Prime Minister shall consider and decide on additional investment plans for charter capital from the state budget capital, the Investment and Development Fund At Enterprises and the Enterprise Reorganization and Development Support Fund.

b) For enterprises established under decision of the owner’s representative agency or assigned to manage, the Prime Minister shall consider and decide on the policy of additional investment in the charter capital of these enterprises.  Based on the approval of the policy of the Prime Minister, the owner’s representative agency shall decide on additional investment in charter capital and adjust the charter capital for enterprises in accordance with Article 11 of this Decree.

c) In case of additional investment in the charter capital from the state budget, the Investment and Development Fund in enterprises and the Enterprise Reorganization and Development Support Fund have an additional capital equivalent to the capital level of the project of national importance, the owner’s representative agency shall report to the Prime Minister for consideration and report to the National Assembly for decision on investment policy. After the National Assembly decides the investment policy, the Prime Minister decides on the investment plan to supplement the charter capital.

5. In the case of additional investment in charter capital from the state budget, based on the approved investment plan for supplementing charter capital, the representative agency of the owner shall send a document to the financial agency at the same level to submit to competent authorities according to the decentralized state budget management and the provisions of law on state budget included in the annual state budget expenditure estimate (the content of capital investment expenditures water into the enterprise) as a basis for additional provision of charter capital to enterprises of which 100% charter capital is held by the State.

6. In case of additional investment in charter capital using only the Enterprise Reorganization and Development Support Fund, the owner’s representative agency must make a plan to report to the Ministry of Finance (enclosed with documents made according to regulations. determined in Clause 1 of this Article) for appraisal and submission to the Prime Minister for consideration and decision.”

7. To amend Article 11 of the Decree No. 91/2015/ND-CP and the amended and supplemented contents in Clause 4, Article 1 of the Decree No. 32/2018/ND-CP as follows:

“Article 11. Making additional investment in charter capital and adjustment of charter capital for enterprises of which 100% charter capital is held by the State

1. Based on the plan for additional investment in charter capital already approved by a competent authority, the owner representing agency shall send a written request (enclosed with the enterprise’s dossier already approved by competent authorities under Article 10 of this Decree) to the finance agency for provision of additional charter capital to the enterprise.

2. The finance agency of the same level shall provide additional charter capital to the enterprise from each specific capital source as follows:

a) In case of providing additional charter capital from the state budget already included in the state budget expenditure estimate approved by competent authorities (according to the state budget management decentralization), the finance agency shall provide capital according to the order and procedures prescribed in the Law on the State Budget;

The additional provision of charter capital to the Vietnam Oil and Gas Group from the host country’s oil and gas interests shall comply with the Government’s Decree promulgating the Financial Management Regulation of Vietnam Oil and Gas Group.

b) In case of allocation of capital from the enterprise reorganization and development support fund, the Ministry of Finance shall base itself on the Prime Minister’s decision to allocate capital from the enterprise reorganization and development support fund to the enterprise.

3. An enterprise shall adjust and add its charter capital in the following cases:

a) Using the Investment and Development Fund in enterprises.

Based on the investment plan to supplement the charter capital approved by the competent authority and the audited annual financial statement, the enterprise shall transfer the investment and development fund to increase the investment capital of owner at the business.

b) Based on the plan for additional investment in charter capital already approved by a competent authority, if the enterprise receives assets transferred from other places which originate from state budget investment or receives money under the State’s support policies (support for relocation, reorganization, land and house, investment in technical infrastructure of industrial parks) to implement investment projects on construction, upgrading and improvement of production and business establishments; asset reassessment according to the guidelines approved by the Prime Minister, it shall base itself on competent authorities’ decisions on transfer of assets and written records of asset handover or the settlement of the State’s support money, revaluation value of assets has been approved by the representative agency to record an increase in owner’s capital at the enterprise.

c) Annually, at the time of making annual financial statements, based on the approved investment plan to supplement charter capital, the value of investment capital of the owner at the beginning of the year on the financial statements of the enterprise and the actual value of additional investment in charter capital as prescribed in Clauses 2 and 3 of this Article, the owner’s representative agency shall report to the Prime Minister for decision the new charter capital level for enterprises of which the Prime Minister decides to establish; the owner’s representative agency shall decide the new charter capital level for enterprises established by decision of the owner’s representative agency or assigned to manage.

In a year where the enterprise receives assets and support money and reassesses its assets but it is not included in the approved charter capital supplement investment plan, the enterprise shall report to the owner’s representative agency for deciding to adjust the charter capital of the enterprise on the basis of the above-mentioned accounting documents without having to comply with the provisions of Articles 9 and 10 of this Decree.

For enterprises that do not need to supplement their charter capital or do not prepare a plan to determine their charter capital and investment sources to supplement their charter capital according to the provisions of this Decree but their equity sources (including capital Investments of the owner, Investment and Development Fund and the basic capital investment in capital) in the annual financial statements of the enterprise is greater than the approved charter capital of the preceding year, the agency representing the owner shall be responsible for reviewing, deciding and directing the enterprise to pay the difference between the equity and the charter capital into the state budget.

4. Enterprises shall adjust the charter capital amounts in their enterprise registration certificates to equal the actual capital amounts already invested by the owner in accordance with the Law on Enterprises.”

5. To amend Clause 1, Article 13 of the Decree No. 91/2015/ND-CP as follows:

“1. State capital representatives at joint stock companies or limited liability companies with two or more members shall compile dossiers of proposal for addition of state capital at their companies, and send them to the owner representing agency for appraisal, and complete the dossiers for submission to the Prime Minister for consideration and decision of decide according to their competence before the state capital representatives participate in voting at the shareholders’ general assemblies or members’ conferences. Such a dossier must comprise:

a) A copy of the enterprise registration certificate; the plan on charter capital increase of the enterprise;

b) The plan on state capital addition as prescribed in Clause 1, Article 18 of the Law on Management and Use of State Capital Invested in Production and Business at Enterprises;

c) A copy of the enterprise’s audited quarterly or annual financial statement nearest to the time of making the plan on state capital addition;

d) Proposed capital sources for addition of state capital to maintain the State’s capital contribution rate in the company, including the state budget; enterprise reorganization and development support fund; and dividends and distributed profits, Investment and development fund, capital surplus and other funds (if any) in correspondence with the state capital invested in the enterprise.”

9. To amend Article 14 of the Decree No. 91/2015/ND-CP as follows:

“Article 14. Addition investment of state capital at joint stock companies and limited liability companies with two or more members

1. The owner representing agency shall base itself on the capital amount and capital sources for addition of state capital at the joint stock company or limited liability company with two or more members, which have been approved by competent authorities (under Article 13 of this Decree), and request in writing the finance agency to carry out the allocation of additional state capital to the joint stock companies or limited liability company with two or more members.

In the case of additional state capital investment in the joint stock companies or limited liability company with two or more members is state budget capital, at the request of the representative of state capital share at the enterprise or the owner’s representative agency shall send documents to the financial agency and the plan agency of the same level for submission to competent authorities according to the decentralization of state budget management and the law provisions on the state budget position in the annual State budget expenditure estimate (the content of spending on state capital investment in enterprises).

2. The finance agency of the same level shall, based on the capital contribution duration as notified by the joint stock company or limited liability company with two or more members and the written request of the owner representing agency, allocate additional state capital to the company according to the approved investment capital amount:

a) In case of addition of state capital from the state budget already stated in the state budget expenditure estimate approved by competent authorities (according to the state budget management decentralization), the finance agency shall allocate capital from the state budget to the company according to the order and procedures prescribed by the Law on the State Budget;

b) In case of allocation of additional state capital invested in the company from the enterprise reorganization and development support fund, based on the Prime Minister’s decision, the Ministry of Finance shall allocate capital from such fund to the company;

3. In case of using dividends and distributed profits, development investment fund, capital surplus and other funds (if any) from the state capital amount for addition of state capital at the joint stock companies or limited liability company with two or more members according to the investment capital level approved by the competent authority, the company shall record a state capital increase after the resolution of the shareholders’ general assembly or members’ council is issued.”

10. To add the following content to Clause 1, Article 18 of the Decree No. 91/2015/ND-CP:

“For the case of funding to buy a part or the whole of an enterprise with state budget capital, based on the approved plan on investment of state capital to buy a part or the whole enterprise, the owner’s representative agency shall send a document to the finance agency and planning agency at the same level for submission to competent authorities according to the decentralized state budget management and the law provisions on state budget arrangement specified in the annual state budget expenditure (the content of spending of state capital investment in enterprises).”

11. To amend and supplement Clause 2, Article 19 of the Decree No. 91/2015/ND-CP, which was amended and supplemented at item c, point 2, Clause 6, Article 1 of the Decree No. 32/2018/ND-CP as follows:

“c) The enterprises with 100% state owned charter capital shall adjust and reduce the charter capital according to the provisions of the enterprise law, and the order of charter capital reduction shall be implemented in accordance with provisions of Article 10 of this Decree.

An enterprise reduces its charter capital in case of repaying part of the capital contribution to the company owner in accordance with the enterprise law shall pay the contributed capital to the state budget.”

12. To amend and supplement point b, Clause 1, Article 21 of the Decree No. 91/2015/ND-CP, which was amended and supplemented by Clause 7, Article 1 of the Decree No. 32/2018/ND-CP with the following contents:

“b) The enterprises with 100% state owned charter capital shall not be allowed to use capital assets and right to use the leased land to contribute their capital to or invest in real estate (except for the enterprises with 100% state owned charter capital whose main businesses are types of real estate stipulated in the Law on Real Estate Business), or contribute their capital or buy shares of banks, insurance companies, securities investment funds, securities companies, management companies of securities investment funds, except for special cases decided by the Prime Minister based on the proposal of the agency representing the owner.

For the State Capital Investment Corporation, the investment of capital out of the enterprise shall comply with the Government’s Decree on functions, tasks and operating mechanism of the State Capital Investment Corporation, not limited to real estate, banking, insurance, securities, and investment funds.”

13. To amend point c, Clause 2, Article 27 of the Decree No. 91/2015/ND-CP as follows:

“c) If an enterprises with 100% state owned charter capital cannot adequately recover the invested capital from the sale of its fixed assets, it shall explain clearly the reasons for insufficient recovery of capital to the owner representing agency before the sale of fixed assets, for supervision.”

14. To amend point b, Clause 1, Article 28 of the Decree No. 91/2015/ND-CP which was amended and supplemented in Clause 11, Article 1 of the Decree No. 32/2018/ND-CP as follows:

“b) The management, accounting and handling of revenues from equitization shall comply with the current law on equitization.  Revenues from outward capital investment of an enterprises with 100% state owned charter capital are reflected in the enterprise’s revenue from financial activities, including:

- The remaining earnings from the after-tax profit after setting up funds in the subsidiary and the difference between the equity and the charter capital of the subsidiary.

- Profits and dividends divided in cash from capital investment activities in joint stock companies or limited liability companies with two or more members; revenues under the current accounting regime of investments under business cooperation contracts that do not form independent legal entities (BCC contracts).”

15. To amend and supplement Article 29 of the Decree No. 91/2015/ND-CP, which was amended and supplemented in Clause 12, Article 1 of the Decree No. 32/2018/ND-CP as follows:

a) To amend the title of Article 29 as follows:

“Article 29. Principles and competence to decide on the transfer of outward investment capital of the enterprises with 100% state owned charter capital

a) To amend item a, point 1 as follows:

“a) The transfer of outward investment capital of the enterprises with 100% state owned charter capital must be based on the capital transfer list approved by a competent agency; irrespective of the level of investment capital and business results of enterprises with contributed capital of the enterprises with 100% state owned charter capital, profit or loss; the organization of capital transfer, preparation of capital transfer dossiers, disclosure of capital transfer information, and reporting on capital transfer results comply with this Decree.

In case an enterprises with 100% state owned charter capital transfers capital in a joint stock company and the charter of a joint stock company has restrictions on share transfer in accordance with the Enterprise Law; there is a commitment between the enterprise of which 100% charter capital is held by the State and shareholders to give priority to share transfer (in the case where shareholders are only allowed to transfer their shares to organizations or individuals that are current shareholders of the company), the enterprise of which 100% charter capital is held by the State shall direct the representative of the company’s capital share to vote at the General Meeting of Shareholders on the amendment of the company’s charter or the enterprise of which 100% charter capital is held by the State shall cooperate with representatives to negotiate with shareholders to amend such commitment in the direction that enterprises with 100% state owned charter capital are freely transferred transfer contributed capital to other investors (including existing shareholders of the company).

Where the representative of the capital share of the enterprise has voted at the General Meeting of Shareholders but is not approved by the General Meeting of Shareholders or the enterprise has 100% of charter capital held by the State as agreed, if shareholders do not approve the amendment of commitments, the transfer of capital of enterprises of which 100% charter capital is held by the State shall comply with the joint stock company charter and commitments between shareholders; the transfer of capital of the enterprise of which 100% charter capital is held by the State to existing shareholders according to the charter and commitments between shareholders shall comply with the principles and order of capital transfer methods as prescribed in this Decree.”

c) To amend item b, point 1 as follows:

“ b) This transfer must adhere to the principle of market, public disclosure, transparency and conservation of outward investment of enterprises with 100% state owned charter capital at the highest level as well as maximum restriction on losses incurred from investment activities.”

d) To amend item c, point 1 as follows:

“c) Determination of the start price at which capital is transferred: The enterprises with 100% state owned charter capital chooses to sign a contract to hire an organization with the function of appraisal of prices to determine and ensure compliance with provisions of law on prices and appraisal of prices.

The organization having the function of price appraisal may select appropriate valuation methods in accordance with the provisions of law on prices and appraisal of prices to determine the starting price; and shall hold responsibility before law for the results of price appraisal.  When determining the starting price, it is necessary to fully determine the actual value of the capital of the enterprises with 100% state owned charter capital in outward investment, including the value created by the land use rights allocated with the collection of land use fees, land use right to be legally transferred, right to use leased land (lease with lump-sum payment for the entire lease term, lease with annual rental payment) in accordance with law provisions. The determination of the brand value (including cultural and historical values) into the starting price for capital transfer shall be implemented in comply with the guidance of the Ministry of Finance.

Use of a single start price for capital transfers according to approaches specified in this Decree must ensure that such start price is existing not later than 06 months from the effective date of the valuation certificate to the final transaction date (applicable to the case in which transactions are performed on stock exchanges); or is valid till the date of declaration of the winning bid (applicable to the open auction and competitive bidding approach) or till the date of signing of the capital transfer contract (according to the agreement approach).

In case of capital transfer in unlisted enterprises or registered for trading on Stock Exchanges in which the capital ratio of the enterprises with 100% state owned charter capital is less than 36% of charter capital and the investment value recorded on the accounting books of the enterprises with 100% state owned charter capital must be transferred under VND 10 billion, the enterprises with 100% state owned charter capital shall consider and decide on the hiring organizations that have the function of price appraisal or decide by themselves the starting price on the date of approval of capital transfer plan to ensure that the transfer value is not lower than the actual value of the contributed capital to be transferred on the latest financial statements to the time of capital transfer of the enterprise receiving contributed capital or not lower than the value of investment recorded in the accounting books of the enterprises with 100% state owned charter capital after deducting the reserve prevention of lost investment capital set up (if any). The real value of the contributed capital amount to be transferred is determined according to the equity value recorded in the accounting books of the enterprise receiving the contributed capital and the capital contribution ratio of the enterprises with 100% state owned charter capital at the enterprise.

In case of capital transfer in joint stock companies listed or registered for trading on the Stock Exchange, the determination of the starting price must comply with the above provisions and the following provisions:

- The starting price of an enterprises with 100% state owned charter capital is announced by the State on the date of approval of the capital transfer plan must not be lower than the prices:  (i) price determined by the organization having the function of appraisal of prices; (ii) the average reference price of 30 consecutive days prior to the date of approval of the capital transfer plan of the traded securities of a joint stock company listed or registered for trading on the Stock Exchange; (iii) the reference price of the securities code of the joint stock company being traded on the Stock Exchange 01 day before the date of approval of the capital transfer plan.

- For joint stock companies listed or registered for trading on the Stock Exchange with the total volume of shares to be transferred with a par value of less than VND 10 billion, the enterprises with 100% state owned charter capital shall consider and decide on hiring an organization with function of price appraisal or decide by itself the starting price on the date of approval of the capital transfer plan to ensure that it is not lower than the average reference price for 30 consecutive days before the date of approval of the capital transfer plan of the securities code traded of the joint stock company listed or registered for trading on the Stock Exchange and the reference price of the securities code of the joint stock company being traded on the Stock Exchange 01 day before the date of approval of the capital transfer plan.”

dd) To supplement in to item d, point 1 the following contents:

“The determination of the value is created by the land use rights allocated with the collection of land use fees, the land use rights legally transferred and the land use rights with lump-sum payment for the entire lease term in the starting price determined by the consulting firm at the time of determining the starting price compared with the land use levy, transfer price, land rental payment which paid by other enterprises.

The determination of the value created by the annual rental payment of land use rights in the starting price shall be implemented according to the following principles:

- Only carry out the determination of the value created by the annual rental payment of land use rights in the starting price for the land area of another enterprise (with contributed capital of the enterprises with 100% state owned charter capital) has been and is directly signed with the state competent authority.

- The value created by the annual land use rights payable in the starting price determined by the remaining land lease term and the difference (if any) between the land rental calculated according to the land price determined by the consulting organization at the time of determining the starting price with the land rental calculated according to the land price for which other enterprises are paying the land rent.

The remaining land lease term as the basis for calculating the value created by the annual rental payment in the starting price is the remaining time in the 05-year unit price stabilization cycle as prescribed by land laws.

In case the enterprise has signed a land lease contract but the time of stabilization of the land rental unit has expired but the enterprise has not re-signed the contract, the remaining land lease term shall be 05 years.

- In cases where enterprises lease land and are exempt from land rental according to the provisions of the land law, the leased land areas exempt from land rental are excluded when determining the starting price for capital transfer.”

e) To amend item g of point 1 as follows:

“g) The enterprises with 100% state owned charter capital shall based on the capital transfer list already approved by the competent agency, to formulate a capital transfer plan to submit to the competent authority for decision on the capital transfer. Capital transfer plan includes the following major contents:

- Legal bases and capital transfer objectives.

- Assessment of investment of capital, gained benefits and effects of transfer of capital invested by the enterprises with 100% state owned charter capital in other enterprises.

 - Financial conditions, business outcomes of enterprises having capital contributed by the enterprises with 100% state owned charter capital and market needs for investment of capital in enterprises having assignable capital. Proposed value gained after capital transfer.

- Capital transfer approach (in case of a lot-type auction, it is obligatory that bases for determination of cases in which lot-type auctions must be clearly informed in accordance with regulations in force).

- Proposed time of implementation and completion of capital transfer.”

16. To amend and supplement Clause 13, Article 1 of the Decree No. 32/2018/ND-CP as follows:

a) To amend the title of Article 29a as follows:

“Article 29a. Implementation methods of transferring outward investment capital of the enterprises with 100% state owned charter capital”

a) To amend and supplement item a of point 1 as follows:

- To amend the second bullet as follows:

“- A disclosure of information according to the form provided in the Appendix II attached to the Decree No. 140/202020/ND-CP of the Government dated November 30, 2020;”

- To add the fourth bullet with the following content:

“- The time limit for the Stock Exchange to disclose information on trading shares of the enterprise’s capital transfer to investors is at least 20 days before the date of capital transfer.”

c) To supplement in to point 2 the following contents:

“The transfer of shares with receivable debts for the enterprises with 100% state owned charter capital with the function of debt purchase, sale and settlement shall be implemented according to the order of capital transfer methods according regulations of this Decree and the guidance of the Ministry of Finance.

Regulation on public auction model (normal/by lot/by lot of shares with receivable debts) and competitive offering (normal/by lot/by lot of shares with receivable debt) to transfer real capital  shall be implemented according to the guidance of the Ministry of Finance.”

d)To amend and supplement point 3 as follows:

- To amend the second bullet, item b as follows:

“- An enterprises with 100% state owned charter capital signs a contract to hire a service center or an asset auction enterprise in accordance with the law on property auction or the Stock Exchange or a securities company (hereinafter referred to as auction organization) for organizing the capital transfer. The auction shall be held at the office of the auction organization, the enterprises with 100% state owned charter capital to be transferred or any other location depending on arrangements between the enterprises with 100% state owned charter capital and the auction organization.

- Amend the third bullet, item c as follows:

“- Right after completion of an auction, based on the auctioning result, the auctioneer shall be responsible for making a record of determination of the auctioning result; the auctioneer, the enterprises with 100% state owned charter capital and representative of the auctioning council (if any) shall endorse this record by using the form given in the Appendix III attached to  the Decree No. 140/202020/ND-CP of the Government dated November 30, 2020.”

b) To amend and supplement item d as follows:

+ To amend the fifth plus sign of the first bullet as follows:

“+ Carrying out other transfer under the Prime Minister’s decision based on proposal of the owner representing agency.”

+ To amend the second bullet as follows:

“- Preparation and submission of documents, implementation, transfer of ownership of shares and report on capital transfer in case of a lot-type auction shall be carried out in accordance with provisions on the open auction specified at point a, point b and point c, Clause 3 of this Article and the following regulations:

+ The determination of auction results shall be implemented as follows:

Valid auction means a price not lower than the starting price as prescribed in the auction regulations.  The winning bid price is determined as the highest valid price that investors buy.

In case two or more investors set the equal highest price and not lower than the starting price, within 05 working days from the date the auction is held in lots, the enterprises with 100% state owned charter capital and coordinated auction organizations shall implement a directly and secretly ballot among investors who pay this price to determine which investor has the highest and only bid price.  The secret ballot price is the price that is not lower than the auction price that investors have paid equal to the price step specified in the auction regulation.  The investor with the highest bid price when voting by secret ballot is that the investor wins the price and will be allowed to buy the entire lot of shares. In case when investors continue to pay the same price when holding secret ballot, there shall be a draw immediately to determine the winning investor.

If the investors who pay the equal highest price all refuse to take part on the secret ballot or the investor has determined to win the bid but refuses to buy, then the auction shall be determined as not successful in order to switch to another transfer method in accordance with law provisions.

+ Based on the capital transfer list approved by a competent authority, the value of capital to be transferred and the market situation at the time of formulating the capital transfer plan, the enterprises with 100% state owned charter capital shall decide to sell the entire shares or divide the total number of shares of the capital to be transferred into many different lot for auction.”

dd) To amend and supplement the third, the fourth and the fifth bullets as follows:

“- Investors who participate in a competitive bidding session shall have the option of distributing total shares into multiple portions for which that they bid, except in the case of a competitive offering in lots.

- Investors determine a buying price at which each portion of shares may be bought and such price shall not be less than the start price, except in the case of a competitive offering in lots.

- Implementation, determination of results, payment for shares, preparation and submission of documents on transfer of ownership of shares and report on capital transfer according to the competitive bidding approach shall be subject to regulations applied to the open auction as provided in point b, point c and point d, Clause 3 of this Article.”

b)To amend and supplement point 6 as follows:

“6. After implementing the methods of public auction, competitive offering, agreement to transfer capital but still not transferring all the capital of the enterprises with 100% state owned charter capital the enterprise needs to be transferred, the enterprises with 100% state owned charter capital shall base on the market demand and development ability of other enterprises to choose the time to continue the capital transfer, and at the same time decide to re-determine the announced starting price for capital transfer according to the order of implementation of capital transfer modes specified in this Decree.

In case the enterprises with 100% state owned charter capital is transferring capital but the Price Valuation Certificate expires, the plan for capital transfer is not required but must re-determine the starting price to continue transferring capital by the method of transfer in which the enterprises with 100% state owned charter capital is implementing (in case where a public auction has been held but is unsuccessful or not fully sold the capital of the enterprises with 100% state owned charter capital to be transferred, the re-determined starting price shall be considered as a basis to organize a competitive offering).

For the State Capital Investment Corporation, after implementing public auction, competitive offering, agreement to transfer capital but still not transferring all the capital to be transferred, the state capital sale mechanism specified in the Government’s Decree on the functions, tasks and operating mechanism of the State Capital Investment Corporation shall be applied."

g) To amend and supplement point 9 as follows:

“9. Principles of financial settlement for transfer outward investment capital, transferring the right to purchase shares and the right to contribute capital of enterprises with 100% charter capital held by the State:

For the proceeds from capital transfer, cost of capital transfer and tax liability as prescribed (if any), the enterprise shall record and record it according to the current enterprise accounting regime.  In case the proceeds from capital transfer after subtracting the cost of capital transfer, the value of the investment recorded in the accounting books and the tax liability (if any) have a negative difference, the enterprises with 100% state owned charter capital uses the set-up reserve to compensate.

For the proceeds from the transfer of the right to purchase shares and the right to contribute capital after deducting reasonable expenses related to the transfer and fulfillment of tax obligations as prescribed (if any), in case the positive difference the enterprise shall record it into the financial income of the enterprise, in case the negative difference, the enterprise shall record it into its financial operation expenses.”

h) To supplement in to point 10 the following contents:

“The authority to decide on the transfer of government bonds and bonds in the enterprises with 100% state owned charter capital invested to enjoy interest shall comply with the comply with the authority to decide on outward capital investment of the enterprise specified in Clause 4, Article 28 of the Law on Management and Use of State Capital Invested in Production and Business at Enterprises.”

i) To supplement in to point 11 the following contents:

“Based on the specific content of the BCC contract, in case an enterprises with 100% state owned charter capital is allowed to transfer capital, the competent authority shall decide to transfer capital by the following method:

In case capital is only allowed to be transferred to members of a BCC contract, the method of capital transfer of an enterprises with 100% state owned charter capital in a limited liability company with two or more members specified in Article 29a of this Decree shall apply.

In case there is no binding capital transfer to a member participating in the BCC contract, the method of capital transfer of an enterprises with 100% state owned charter capital in unlisted joint stock company shall be applied as prescribed in Article 29a of this Decree.”

k) To supplement in to point 12 the following contents:

“12. The State Capital Investment Corporation is entrusted by domestic and foreign organizations and individuals to jointly transfer capital of enterprises invested by the State Capital Investment Corporation on the basis of a commitment to jointly carry out capital transfer, ensuring publicity and transparency.  The capital transfer in this case shall comply with this Decree and the capital sale mechanism of the State Capital Investment Corporation but must comply with the provisions of the Law on Enterprises and the Law on Securities on the public offering of securities.”

17. To amend and supplement Clause 3, Article 37 of the Decree No. 91/2015/ND-CP, which was amended and supplemented in Clause 14, Article 1 of the Decree No. 32/2018/ND-CP as follows:

“3. The rights, responsibilities, wages, remunerations, bonuses and other benefits of state capital representatives must comply with Articles 48 and 50 of the Law on Management and Use of State Capital Invested in Production and Business at Enterprises and the following contents:

The person representing state enterprise’s contributed capital in enterprises of which shares and contributed capital is held by the state shall expect opinions from the owner’s representative entity on the annual plan for distribution of after-tax profits of enterprises that (s)he represents to give his/her opinions, cast his/her vote and make his/her decision in the Shareholders’ General Meeting or the meeting of the Board of Members in accordance with regulations in force. Before directing the representative to give opinions, vote and make decisions at the General Meeting of Shareholders, the meeting of the Members’ Council, the owner’s representative agency must send a written request for opinions to the financial agency at the same level (for enterprises of which at least 36% of shares and contributed capital is held by the state). Within 10 working days from the date of receipt of the owner representing agencies’ document (enclosed: the current company’s organization and operation charter, the audited annual financial statement and plans for the annual dividend and profit after tax of the enterprise), the finance agency of the same level gives opinions for the owner representative agency to direct the representative person of the state capital shares at the enterprise to give opinions, vote and decide at the General Meeting of Shareholders, meetings of the Members’ Council. The plan for the annual distribution of after-tax profits in enterprises with shares or contributed capital of the State (except credit institutions being joint stock commercial banks with state capital) must comply with the following principles:

- For enterprises with shares or contributed capital of which the State holds more than 50% of the charter capital or the total number of shares with voting rights, the plan for annual dividends and profit after tax is distributed in order as follows:

+ Dividing to capital contributing partners under the signed economic contracts (if any);

+ Offsetting the previous years’ losses which are no longer eligible for being offset from before-tax profits.

+ A maximum deduction of 30% into the enterprise development investment fund (if the establishment and operation of the enterprise’s charter provides for the setting up of this fund).

+ Deduction for the reward fund and welfare fund for the employees in the enterprise, the reward fund for the enterprise manager according to the Government’s regulations on labor, salary, remuneration, and bonus for companies which have shares and dominating capital held by the State.

+ The remaining profit is divided by all dividends and profits in cash for shareholders and capital contributors.  Dividends and profits are divided in cash for the capital contributed by the State in the enterprise shall be remitted into the state budget according to legal regulations.

- For enterprises with shares or contributed capital of which the State holds from 36% to 50% of the charter capital, after consulting the finance agency of the same level, the representative agency of the owner is responsible to direct the representative person of state capital in the enterprise to give opinions, vote and decide at the General Meeting of Shareholders, the meeting of the Members’ Council on the annual after-tax profit distribution plan in the same order as the enterprise having shares or contributed capital in which the State holds 50% or more of the above charter capital.

- For enterprises with shares or contributed capital of which the State holds less than 36% of the charter capital, based on the annual business and production plan, the owner’s representative agency is responsible for directing the representative person of the State capital in the enterprise participating in opinions, voting and deciding at the General Meeting of Shareholders and/or meetings of the Members’ Council the plan to appropriately distribute the annual profit after tax, in which the remaining profit after setting up the funds in accordance with the Charter, the Financial Management Regulation is divided all the dividends and profits in cash to the shareholders, capital contributors.  Dividends and profits divided in cash by the State capital contribution in this enterprise shall be remitted into the state budget according to legal regulations.

b) For credit institutions which are joint stock commercial banks with state capital, the distribution of profits after corporate income tax shall comply with the provisions of the Decree No. 93/2017/ND-CP dated July 7, 2017 of the Government on the financial regime applicable to credit institutions and foreign bank branches and financial supervision and assessment of efficiency of state capital investment at credit institutions with 100% state owned charter capital and credit institutions with state capital and its amending, supplementing, replacing documents.

c) The person representing the state contributed capital shall prepare regular reports within the maximum duration of 15 days from the end date of each quarter and 30 days from the end date of a year, and ad-hoc reports upon the request of the owner’s representative entity and same-level finance authorities, on manufacturing, business and financial conditions, and give recommended solutions that may be applied in enterprises that he or she is appointed to act on behalf as the state capital representative person. All reports that the representative person sends to the owner’s representative entity and the same level finance authorities shall be made by using the form given in the Appendix III attached to this Decree.”

18. To amend Article 38 of the Decree No. 91/2015/ND-CP amended and supplemented by Clause 15, Article 1 of the Decree No. 32/2018/ND-CP as follows:

a) To amend and supplement item a of point 1 as follows:

“a) The transfer of outward invested capital of state enterprises must be aligned with the list of enterprises having state capital carrying out capital transfer which has been approved by competent authorities according to criteria for classification of state enterprises, enterprises having state capital and the list of state enterprises subject to restructuring in stages, which are released by the Prime Minister; such transfer is carried out irrespective of the amount of investment and whether profit or loss of enterprises having capital contributed by state enterprises; organization of transfer of capital and preparation of documents on capital transfer, dissemination of information about capital transfer, report on capital transfer results, procedures for transfer of the ownership of shares of transferred capital and delivery of documents and reports on results of capital transfer to regulatory authorities must be subject to provisions specified in this Decree.

Where the owner’s representative agency transfers state capital invested in joint stock companies whose statutes prescribe that share transfer is restricted under the provisions of the Law on Enterprises or there is a commitment between the owner’s representative agency and shareholders on the priority of share transfer (in the event that shareholders are allowed to transfer their shares only to organizations and individuals that are existing shareholders in the enterprise), the owner’s representative agency shall direct the representative of state capital in the enterprise to give opinions at the General Meeting of Shareholders on the amendment of the charter of the joint stock company or owner’s representative agency coordinates with the capital representative to negotiate with shareholders to amend commitments so that the State shareholders are able to transfer capital to other investors (including to existing shareholders).

In case the person representing the state capital in the enterprise has voted at the General Meeting of Shareholders without approval of the General Meeting of Shareholders or the agency representing the owner has agreed but the shareholder disapproves upon agreement to amend commitments, the transfer of state capital shall comply with the joint stock company charter and commitments between shareholders; the transfer of state capital to existing shareholders according to the charter and commitments between shareholders shall comply with the principles and order of capital transfer methods specified in this Decree.

When converting an enterprise of which 100% charter capital is held by the State into a limited liability company with two or more members in the form of part of the state capital transfer, the capital transfer will be done according to the order of state capital transfers methods provided for in this Decree.”

b) To amend item b of point 1 as follows:

“b) This transfer must adhere to the principle of market, public disclosure, transparency and state capital recall at the highest level as well as maximum restriction on losses incurred from capital transfer.”

c) To amend item c, point 1 as follows:

“c) Determination of the start price at which transfer of state capital is carried out:

The owner’s representative agency or organizations, individuals belonging to the units affiliated to the owner’s representative agency or the representative of state capital share authorized in writing by the representative agency the selection of signing contract to hire an organization with the function of price appraisal to determine and ensure compliance with the law on price and appraisal of prices.

Organizations having the function of price appraisal can choose appropriate valuation methods in accordance with the price law and price appraisal to determine the starting price; hold responsibility before law for the results of price appraisal. When determining the starting price, it is necessary to fully determine the actual value of the State’s capital invested, including the value created by the land use rights assigned with the collection of land use levies, the land use rights legally transferred, the right to use the leased land (including lump sum rental payment for the entire lease term, annual rental payment) in accordance with the provisions of law.  The determination of the brand value (including cultural and historical values) into the starting price for capital transfer shall be implemented in comply with the guidance of the Ministry of Finance.

Use of a single start price for capital transfers according to approaches specified in this Decree must ensure that such start price is existing not later than 06 months from the effective date of the valuation certificate to the final transaction date (applicable to the case in which transactions are performed on stock exchanges); or is valid till the date of declaration of the winning bid (applicable to the open auction and competitive bidding approach) or till the date of signing of the capital transfer contract (according to the agreement approach).

In case of capital transfer in unlisted enterprises or registered for trading on Stock Exchanges in which the State’s holding rate is less than 36% of the charter capital and the value of state capital held in the charter capital to be transferred is less than VND 10 billion, the representative agency of the owner shall consider and decide on the hiring of an organization with function of price appraisal or decide by itself the starting price at the date of approving the plan of capital transfer ensure that the transfer value is not lower than the actual value of the contributed capital amount to be transferred on the financial statements closest to the time of capital transfer of the enterprise with State contributed capital. The real value of the contributed capital amount to be transferred is determined according to the equity value recorded on the accounting books of the enterprise receiving the contributed capital and the State’s capital contribution ratio in the enterprise.

In case of capital transfer in joint stock companies listed or registered for trading on the Stock Exchange, the determination of the starting price must comply with the above provisions and the following provisions:

- The starting price announced by the owner’s representative agency on the date of approval of the capital transfer plan must not be lower than the prices: (i) determined price of the organization having the function of price appraisal; (ii) the average reference price of 30 consecutive days prior to the date of approval of the capital transfer plan of the traded securities of a joint stock company listed or registered for trading on the Stock Exchange; (iii) the reference price of the securities code of the joint stock company being traded on the Stock Exchange 01 day before the date of approval of the capital transfer plan.

- For joint stock companies listed or registered for trading on the Stock Exchange where the total volume of shares to be transferred is less than VND 10 billion, the owner’s representative agency shall consider and decide on hiring an organization with function of price appraisal or decide by itself the starting price on the date of approval of the capital transfer plan to ensure that it is not lower than the average reference price for 30 consecutive days before the date of approval capital transfer plan of the securities code traded of a joint stock company listed or registered for trading on the Stock Exchange and the reference price of the securities code of a joint stock company being traded on the Stock Exchange 01 before the date of approval of the capital transfer plan.”

d) To supplement into item d of point 1 the following contents:

“The determination of the value is created by the land use rights allocated with the collection of land use fees, the land use rights legally transferred and the land use rights with lump-sum payment for the entire lease term in the starting price comply with the land price determined by the consulting organization at the time of determination of the starting price in comparison with the land use levy, transfer payment, land rental paid by enterprises with State contributed capital.

The determination of the value created by the annual rental payment of land use rights in the starting price shall be implemented according to the following principles:

- Only carry out the determination of the value created by the annual rental payment land use rights in the starting price for the land area of the enterprise with the State’s capital contribution which has been directly signed with competent State agency.

- The value created by the annual land use rights payable in the starting price determined by the remaining land lease term and the difference (if any) between the land rental calculated according to the land price determined by the consulting organization at the time of determining the starting price with the land rental calculated according to the land price for which the State-contributed enterprises are currently paying.

The remaining land lease term as the basis for calculating the value created by the annual rental payment in the starting price is the remaining time in the 05-year unit price stabilization cycle as prescribed by land laws. In case the enterprise has signed a land lease contract but the time of stabilization of the land rental unit has expired but the enterprise has not re-signed the contract, the remaining land lease term shall be 05 years.

- In cases where enterprises lease land and are exempt from land rental according to the provisions of the land law, the leased land areas exempt from land rental are excluded when determining the starting price for capital transfer.”

dd) To amend item dd of point as follows:

“dd) The owner representing agencies or organizations, individuals of the owner representing agencies’ affiliated unit or the person representing the state capital who tasked by the owner’s representative agencies in writing shall hire an accredited auctioning organization or hire another consultancy organization that provide services related to capital transfer to organize necessary activities of transfer of state capital invested in joint stock companies and multiple-member limited liability companies.”

19. To amend and supplement Clause 16, Article 1 of the Decree No. 32/2018/ND-CP as follows:

a) To amend and supplement item a of point 1 as follows:

- To amend the second bullet as follows:

“- The information disclosure using the form prescribed in the Appendix II attached to the Decree No. 140/2020/ND-CP of the Government dated November 30, 2020;”

- To add the fourth bullet with the following content:

“- The time limit for the Stock Exchange to disclose information on trading shares of the enterprise’s capital transfer to investors is at least 20 days before the date of capital transfer.”

b) To supplement in to point 2 the following contents:

“Regulation on the model of public auction (normal/by lot) and competitive offering (normal/by lot) for capital transfer shall comply with the guidance of the Ministry of Finance.”

c) To amend the second bullet, item b, point 3 as follows:

“-  The owner representing agencies or organizations, individuals of the owner representing agencies’ affiliated unit or the person representing the state capital who tasked by the owner’s representative agencies in writing shall hire a service center or property auction enterprise in accordance with the law on property auction or the Stock Exchange or a securities company (hereinafter referred to as auction organization) to organize the real currently transferring capital. The auction shall be held at the office of the auctioneer, the owner’s representative entity or the enterprise having state capital to be transferred or any other location depending on arrangements between the owner’s representative entity and the auctioneer.”

d)To amend and supplement point 6 as follows:

“6. If the number of state capital to be transferred is not sold up even after completion of the open auction, the competitive bidding and arrangement approach, the owner’s representative entity shall measure the market demands and development ability of enterprises to choose the time to continue the capital transfer, and at the same time decide to re-determine the announced starting price for capital transfer in the order of implementation of the capital transfer method specified in this Decree.

In case the owner representing agency conducting capital transfer but the Price Valuation Certificate expires, the plan for capital transfer is not required but must re-determine the starting price to continue transferring capital by the method of transfer in which the owner representing agencies is implementing (in case where a public auction has been held but is unsuccessful or not fully sold the capital of the enterprises with 100% state owned charter capital need to be transferred, the re-determined starting price shall be considered as a basis to organize a competitive offering).”

dd) To supplement point 10 on state capital transfer expense as follows:

“10. The owner representing agencies shall base on the roadmap and plan on state capital divestment in enterprises approved by the competent authority, direct the functional departments to make the estimate of state capital transfer expenses (including the transfer of the right to purchase shares or the right to contribute capital).  Expenses for state capital transfer shall be approved by the representative agency of the owner on the approval of the cost estimate, finalization and decision on a specific level of expenditure, ensuring that there are sufficient reasonable, valid and economical effective as prescribed by the laws in force; hold legal responsibility for their decisions.  Expenses for state capital transfer include costs of hiring price appraisal consultants, costs of organizing the auction, costs of carrying out legal procedures for the transfer, taxes, fees and charges (if any) must be submit to the State and other related expenses (excluding remuneration for members of the owner representing agencies, the representative of state capital and members of the enterprise).

Based on the decision on the cost estimate of capital transfer, the representing agencies shall send a written request to the Ministry of Finance to propose the Enterprise Reorganization and Development Support Fund (hereinafter referred to as the Fund) to grant money in advance. The Ministry of Finance shall issue a decision to issue an advance fund up to 70% of the total capital transfer cost estimate according to the approved decision to the owner representing agencies.  On the basis of capital transfer results, the owner’s representative agency is responsible for settling the proceeds from the capital transfer and the cost of capital transfer. If the proceeds from capital transfer and the advance of capital transfer expenses are higher than the actual reasonable expenses related to capital transfer, the difference shall be settled and remitted to the Fund. If the proceeds from capital transfer and the advance for capital transfer expenses are lower than the actual reasonable expenses related to capital transfer, the owner’s representative agency shall request in writing the Ministry of Finance to grant the supplement the missing difference from the Fund. The Ministry of Finance issues a decision to issue the Fund to allocate this missing portion to the owner representing agencies.

The owner’s representative agency is responsible for reporting results of capital transfer and finalization (including proceeds from capital transfer, actual reasonable expenses related to the capital transfer, the advance received and the over/under fee paid or requested for additional grant from the Fund) together with relevant documents to the Fund as a basis for expense refund and cost accounting.

For units that have transferred state capital before the effective date of the Decree No. 140/2020/ND-CP of the Government dated November 30, 2020, but not success or proceeds from capital transfer not enough to cover costs or the owner representing agencies has authorized and/or assigned in writing to individuals to select and sign contracts to hire organizations with function of appraisal of prices, hire auction organizations, hire other consulting organizations to provide services related to capital transfer in order to organize the capital transfer but the proceeds from the capital transfer are not enough to cover costs, the owner representing agencies is responsible for approving the capital transfer results, settling the proceeds and other reasonable expenses related to capital transfer and submit written proposal to the Ministry of Finance attached with relevant documents and dossiers so that the Ministry of Finance grants the Fund provides to supplement the missing difference to the owner representing agencies.

In case the units are transferring capital but having to suspend or terminate the capital transfer under the decision of the Prime Minister, the owner representing agencies shall approve the settlement of practical related expenses, send a written request to the Ministry of Finance, attached with relevant documents and dossiers, so that for the Ministry of Finance grants the Fund provides to cover the capital transfer expense to the owner representing agencies.”

20. To amend and supplement Clause 17, Article 1 of the Decree No. 32/2018/ND-CP as follows:

“Article 38b. Implementation of transfer of the right to buy shares and the capital contribution right

1. Where the capital owner has invested capital in an enterprise but does not belong to the sector or field in need of further investment and must transfer the capital according to the classification criteria of state enterprises or enterprises with state capital, the list of state owned enterprises to be arranged in each stage promulgated by the Prime Minister, the capital owner shall direct the representative of state capital share/representative of the enterprise’s capital to develop capital transfer plan as prescribed in this Decree and with voting opinions at the General Meeting of Shareholders (at a joint stock company) or a Members’ Meeting (at a limited liability company with two or more members) not to approve the issuance of shares to increase charter capital or increase the capital contribution of members, leading to a decrease in the proportion of capital held by the owner at the enterprise.

In case the representative of state capital/the representative of corporate capital has voted at the General Meeting of Shareholders (at a joint stock company) or the Members’ Meeting (at a limited liability company two or more members) not to approve the issuance of shares to increase charter capital or increase the capital contribution of members, leading to a decrease in the proportion of capital held by the owner at the enterprise but not approved by the General Meeting of Shareholder of a joint stock company or the Members’ Council of a limited liability companies with two or more members, the capital owner shall consider and decide to transfer the right to purchase shares (in a joint stock company) and the right to contribute capital (in a limited liability company with two or more members) for another organization or individual as prescribed in Clause 2 of this Article.

2. In case the capital owner has invested capital in an enterprise but is not in the sector or field that requires further investment and is not required to transfer the capital according to the classification criteria of state owned enterprises or enterprises with state capital, the list of state owned enterprises to be arranged in each stage promulgated by the Prime Minister, the capital owner shall direct the representative of state capital share or the representative of capital distribution of the enterprise to develop the plan to transfer the right to purchase shares (in a joint stock company), the right to contribute capital (in a limited liability company with two or more members) when the enterprise increases its charter capital.

The transfer of the right to buy shares shall be carried out through public auction. Determination of the start price at an open auction of the right to buy shares shall be implemented as prescribed at point c, Clause 1, Article 29 or point c, Clause 1, Article 38 of this Decree. In the event that the permitted duration within which shareholders exercise the right to purchase shares  according to the stock issuing plan of the issuing enterprise is too short to hold an public auction intended for transfer purposes, the owner of capital shall consider granting the decision on the price of the right to buy shares, transfer methods under direct arrangement, and ensure compliance with the principles of market price and efficiency. The person representing state capital/the person representing enterprise’s capital shall consult the plan for offering and amount of capital to be offered for sale by issuing organizations to report to the capital owner to grant their decision on approach to transfer of the right to buy shares by open auction or arrangement approaches. The selling price shall be agreed upon, based on the price determined according to provisions prescribed at point c, Clause 1, Article 29 or Point c, Clause 1, Article 38 of this Decree.

The transfer of the right to contribute capital shall be implemented by the transfer method of state capital/ capital of the enterprises with 100% state owned charter capital at the limited liability companies with two or more members as prescribed in this Decree.

The person competent to decide on the transfer of the right to buy shares or contribute capital may not decide on the transfer to an enterprise in which his/her spouse, blood father, adoptive father, blood mother, adoptive mother, offspring, in-law child, adopted child, blood brother or sister, in-law brother or sister is a manager, nor decide on the transfer to individuals with the above mentioned ties.

3. In cases where an enterprise must transfer capital according to the criteria for classifying state enterprises or enterprises with state capital, the list of State enterprises to organized in each period has been approved by the Prime Minister but the enterprise develops a plan to increase the charter capital or increase the capital contribution of members to expand, develop operations and the divestment plan, the representative of state capital/the representative of the capital of the enterprise shall develop specific plan to report to the owner’s representative agency. The owner’s representative agency shall consult the Ministry of Finance before submitting it to the Prime Minister for specific consideration and decision.”

21. To supplement to Clause 5, Article 40 of the Decree No. 91/2015/ND-CP the following content:

“5. Before June 30, 2021, based on regulations on determination of charter capital and additional investment in capital for enterprises with 100% state owned charter capital as prescribed in this Decree, enterprises with 100% state owned charter capital shall make a plan to determine the charter capital and additional investment capital sources to report to the owner representing agencies for submission to the Prime Minister to consider, decide and organize the implementation of additional investment in capital and adjust the charter capital in accordance with law provisions.”

22. To supplement Clause 5a and Clause 5b, Article 42 of the Decree No. 91/2015/ND-CP with the following contents:

“5a. The owner representing agencies shall direct the representative of state capital in enterprises with 50% or more of the State’s capital contribution based on the provisions of the Decree No. 91/2015/ND-CP, Decree No. 32/2018/ND-CP and this Decree to comment on amending and supplementing the charter of enterprises with State contributed capital and other internal governance regulations to suit their management, using capital and assets in enterprises and organizing divestment of investment capital in other enterprises.

5b. The Members’ Council or the President of enterprises with 100% state owned charter capital shall direct the representative of the enterprise’s capital share in enterprises with 100% state owned charter capital from 50% or more of the charter capital is based on the provisions of the Decree No. 91/2015/ND-CP, Decree No. 32/2018/ND-CP and this Decree to have comments on the amendment and supplement of the charter of enterprises with contributed capital of enterprises with 100% state owned charter capital and other internal management regulations to suit when managing and using capital and assets in enterprises and organizing the divestment of investment capital in other businesses.”

23. To promulgate together with this Decree the Appendix II on the form of the information disclosure on the capital transfer which replaces Appendix I attached to the Decree No. 32/2018/ND-CP; Appendix III on the form of auction result determination record replacing the Appendix II attached to the Decree No. 32/2018/ND-CP.

Article 3. To repeal the following provisions prescribed in the Decree No. 126/2017/ND-CP as follows:

1. Provision prescribed in Clause 4 Article 11.

2. Provision prescribed in Article 12:

a) Provision prescribed at point b, Clause 5: “Within 3 years preceding the time of filing a dossier of registration for providing enterprise valuation consultancy services, such organization must have performed at least 30 contracts on provision of services in one of the above-said areas;”

Provisions prescribed at point d, Clause 5.

Provisions prescribed at point c, Clause 6.

3. Provisions prescribed in Clause 1, Article 13.

4. Provisions prescribed in Clause 3, Article 17.

5. Provisions prescribed at point d, Clause 2, Article 21.

6. Provisions prescribed in Clause 6, Article 30.

7. Provision prescribed at point a, Clause 2 Article 31: “For some special enterprises, the value of their brands shall be decided by the owner representing agency based on the reports of consultancy agencies based on their historical and traditional characteristics (if any).”

Article 4. To repeal provisions prescribed in Clause 5 Article 4 of the Decree No. 91/2015/ND-CP

Article 5. To repeal provisions prescribed in Article 1 of the Decree No. 32/2018/ND-CP as follows:

1. Provisions prescribed at item b, point 2, Clause 5: “Management and maintenance of road and inland waterways”.

2. Provisions prescribed at item c, point 1, Clause 13: “Where the price of trading of shares of joint stock companies based on the floor price is higher than the payment price which is determined according to specific transfer approaches (e.g. open auction, competitive bidding and arrangement) on the date of opening of public auction, competitive bidding or signing of capital transfer contract (with respect to arrangement approach), investors shall be obliged to pay state enterprises for shares at the trading price which is the floor price defined on that day; where the price of trading of shares of joint stock companies based on the floor price is less than the payment price which is determined according to specific transfer approaches (e.g. open auction, competitive bidding and arrangement) on the date of opening of public auction, competitive bidding or signing of capital transfer contract (with respect to arrangement approach), or the floor price does not exist in the absence of transactions, investors shall be bound to pay state enterprises for shares at the price specific to capital transfer approaches (e.g. open auction, competitive bidding and arrangement).”

3. Provisions prescribed at the fifth bullet of item b, point 3, Clause 13:

“State enterprise/auctioneer shall, while disclosing information about auctioning of shares for capital transfer, send auctioning documents that they have prepared in accordance with regulations in force to the owner’s representative entity and the Ministry of Finance (Department of Corporate Finance).”

4. Provisions prescribed at item c, point 1, Clause 16: “where the price of trading of shares of joint stock companies based on the floor price is higher than the payment price which is determined according to specific transfer approaches (e.g. open auction, competitive bidding and arrangement) on the date of opening of public auction, competitive bidding or signing of capital transfer contract (with respect to arrangement approach), investors shall be obliged to pay state enterprises for shares at the trading price which is the floor price defined on that day; where the price of trading of shares of joint stock companies based on the floor price is less than the payment price which is determined according to specific transfer approaches (e.g. open auction, competitive bidding and arrangement) on the date of opening of public auction, competitive bidding or signing of capital transfer contract (with respect to arrangement approach), or the floor price does not exist in the absence of transactions, investors shall be bound to pay state enterprises for shares at the price specific to capital transfer approaches (e.g. open auction, competitive bidding and arrangement).”

5. Provisions prescribed at the fifth bullet of item b, point 3, Clause 16:

“The owner’s representative entity/the auctioneer shall, while disclosing information about auctioning of shares for capital transfer purposes, send auctioning documents that they have prepared in accordance with regulations in force to the Ministry of Finance (Department of Corporate Finance).”

Article 6. Implementation provisions

1. This Decree takes effect on the date of its signing.

2. To replace the phrase “state enterprise” by the phrase “enterprises with 100% state owned charter capital” prescribed in the Decree No. 126/2017/ND-CP, the Decree No. 91/2015/ND-CP and the Decree No. 32/2018/ND-CP.

3. In the course of implementation of this Decree, if there are any problems or entanglements, the Ministers, heads of ministerial-level agencies, heads of government-attached agencies, the Chairperson of People’s Committee of provinces and central affiliated cities, the Members’ Council of the parent company of economic groups, state corporations, enterprises with 100% state owned charter capital, the representative of the state capital share shall report in writing to the Ministry of Finance for the synthesis report to the Prime Minister, the Government for consideration and decision.

4. Ministers, Heads of Ministry-level agencies, Heads of Governmental agencies, the Chairperson of People’s Committee of provinces and central affiliated cities, the Boards of Members of parent companies controlling economic incorporations, state general companies, enterprises with 100% state owned charter capital  and the persons representing state capital shall implement this Decree./.

For the Government

The Prime Minister

Nguyen Xuan Phuc