On 5 November 2009, the Government issued Decree No. 101/2009/ND-CP on piloting the establishment, organisation, operation and management of State economic groups, effective on 20 December 2009 ("Decree 101").
State economic groups are established on a pilot basis for the purposes of:
- Concentrating investment in and mobilising resources for the formation of groups of large-sized companies in key branches and industries, thereby raising their competitiveness and accelerating the international economic integration
- Enhancing the effective management and supervision of State capital and assets invested in enterprises of the groups
- Creating grounds for further improvement of mechanisms, policies and laws on economic groups
For more information about Decree 101, see Mayer Brown's 25 November 2009, Client Alert "New Decree on Establishing State Economic Groups".
On 11 February 2010, Deputy Prime Minister Nguyen Sinh Hung issued Official Letter No. 294/TTg-DMDN to request each State economic group to observe the following provisions of Decree 101:
- To implement the management and organisational structure of the parent company comprising of the board of management (i.e. board of directors), general director (i.e. general manager), control board and other auxiliary departments (Article 20). The chairman of the board of management of the parent company may not concurrently hold the post of general director (Article 23.1). The general director is the legal representative of the parent company
- To review and amend the charter (i.e. the articles of association) of the parent company in such a manner as to ensure strict compliance with Decree 101 and other provisions of applicable laws, and to submit, within Quarter 1 of 2010, the amended charter to the Prime Minister for approval
A parent company, as stipulated in Decree 101, is an enterprise whose charter capital is wholly owned or whose controlling right is held by the State.