Thursday, August 17, 2017 - 13:16:42

Conference urges looser limits on share transfers

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A conference of experts from the securities industry held here on Feb. 23 called for loosening of regulatory restrictions of share transfers, complaining that the regulation interfered with the ability of many firms to effectively raise capital.

The conference was called by the Vietnam Chamber of Commerce and Industry to review the first year of implementation of Government Decree No 01/2010/ND-CP issued in January 2010.

Under the decree, shares offered by private placement of joint stock companies are restricted from transfer within one year, and the interval between two consecutive private placements of shares is required to be at least six months.

Lawyer Pham Chi Cong from Khai Phong Law Co Ltd said the restriction consistently reduced the feasibility and attractiveness of share placement plans.

"Shares offered for sale aim to mobilise capital in order to serve business purposes of joint stock companies," Cong said. "Changes in shareholders after that don't affect the operation of companies."

The transfer restrictions effectively limited joint stock companies to offer to only trading partners, many of which were not always ready to invest for a long term, Cong said.

Meanwhile, Cao Ba Khoat, director of business consultancy firm K & Associates Co Ltd, agreed that the six-month interval between two consecutive placements was too long and had decreased the investment opportunities of companies.

Pham Khac Nam , head of business registration for Bac Ninh province's Department of Planning and Investment, said dossiers for registration of private offers of shares to raise capital of many companies in Bac Ninh had also not been processed due to the lack of guidance on implementation of this decree.

Nam proposed the abolishsment of the decree altogether, as the work had run smoothly before the existence of the decree.

Nguyen The Tho, director of Securities Issuance Management Department of the State Securities Commission, said the commission would review the decree and submit its recommendations to the Ministry of Finance in the near future. He hoped a revised decree would be issued sometime after July 1, when the amended Law on Securities takes effect./.
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