1. Recent Developments
On 29 September 2018, the Government passed Decree No. 131/2018/NDCP ("Decree No. 131"), which stipulates the functions, tasks, authority and organizational structure of the Commission for the Management of State Capital at Enterprises ("CMSC").
The CMSC was established under Resolution No. 09/NQ-CP dated 3 February 2018 by the Government. Considered an agency under the purview of the Government, the CMSC has its own legal status and will be responsible for managing State capital and assets.
The CMSC will replace Ministries, ministerial agencies, agencies under the Government's purview and provincial-level People's Committees ("Relevant Authorities") as the representative of the State with respect to State capital and exercise the State's ownership rights in the State Capital Investment Corporation (SCIC) and eighteen (18) other State economic groups and corporations. The aggregate value of State capital in these economic groups and corporations is estimated to be 50% of the total value of State capital invested in enterprises.1
Decree No. 131 came into effect on 29 September 2018.
2. Specific regulations
2.1 Main tasks and functions of the CMSC
In general, the CMSC will act as the State's representative as the owner of the State capital in relevant enterprises, amongst others. In particular:
(a) For State economic groups and corporations wholly owned by the State and assigned to be managed by the CMSC:2
- Excluding State economic groups and corporations established by the Prime Minister,3 the CMSC has the authority to decide the amount of charter capital (and any amendments thereto); issue decisions on the: establishment, restructuring, change in ownership and dissolution, as well as file requests for bankruptcy; promulgate the charter (and any amendments thereto); and approve the five-year investment development plans of the State economic groups and corporations;
- Excluding the (re)appointment of positions subject to the authority of the Prime Minister,4 the CMSC has the authority to appoint or re-appoint certain managerial personnel of the State economic groups and corporations (e.g., chairman of the board of members, members of the board of members, company's president, controllers, financial controllers);
- The appointment of director or general director by the board of members (or company's president) is subject to the approval of the CMSC;
- The CMSC has the authority to issue the in-principle approval for the board of members (or company's president) to decide to contribute, increase, decrease, or transfer investment capital of the state economic groups and corporations into other companies.
(b) For the portion of State capital invested in enterprises which is assigned to be under its management, the CMSC is entitled to:5
- appoint or remove the individual representing the State capital in such enterprises in accordance with the law;
- decide within its authority to increase the State investment capital, transfer shareholdings or capital contribution of State capital in such enterprises.
2.2 State economic groups and corporations to be managed by the CMSC
Under Decree No. 131, the CMSC will replace the Relevant Authorities to exercise State capital ownership rights in the following enterprises:6
(a) The SCIC;
(b) Eighteen (18) State economic groups and corporations, including:
- Vietnam Oil and Gas Group (PetroVietnam);
- Vietnam Electricity (EVN);
- Vietnam National Petroleum Group (Petrolimex);
- Vietnam Chemical Group (VINACHEM);
- Vietnam Rubber Group (VRG);
- Vietnam National Coal-Mineral Industries Holding Corporation Limited (Vinacomin/TKV);
- Vietnam Posts and Telecommunications Group (VNPT);
- Vietnam Mobile Telecom Services One Member Limited Liability Company (MobiFone);
- Vietnam National Tobacco Corporation (Vinataba);
- Vietnam Airlines JSC (Vietnam Airlines);
- Vietnam National Shipping Lines (Vinalines);
- Vietnam National Railway Corporation (VNR);
- Vietnam Expressway Corporation (VEC);
- Airports Corporation of Vietnam (ACV);
- Vietnam Coffee Corporation (VinaCafe);
- Southern Food Corporation;
- Northern Food Corporation; and V
- ietnam Forestry Corporation.
The above list is not exhaustive and could be expanded, subject to the decisions of the Prime Minister.
2.3 Transitional provisions
The provisions on rights and responsibilities of the CMSC as stipulated under Decree No. 131 will replace those of the Relevant Authorities under relevant decrees of the Government and charters of related State economic groups and corporations.7
The Relevant Authorities must transfer their rights as representatives of State capital in the SCIC and the other eighteen (18) State economic groups and corporations as aforementioned to the CMSC within forty-five (45) days from the effective date of this Decree.8 Procedures to transfer rights will be subject to further guidance of the Prime Minister.