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plan on capital use of each issuance drive must
be clarified, enterprises must also ensure that the
issuance time of each batch shall not be extended
over 90 days in accordance with the law on
securities; the disclosure of information must
be in accordance with regulations. When satisfy
conditions mentioned above, issuing enterprise
may issue bonds in multiple installments but not
exceeding 12 months.
Furthermore, in order to clarify regulations
on bond issuance dossiers and create favorable
conditions for enterprises to issue bonds, the draft
decree stipulates that enterprises’ annual financial
statements must be audited and is a full approval.
When the audit opinion is an exception, the
exception must not affect the offering conditions
and the firmmust explain the exclusion and impact
of the exclusion factor on the financial result and
ability of the repayment of principal and interest of
corporate bonds. At the same time, the draft decree
specifies the use of audited financial statements
of parent companies, subsidiaries, and companies
formed after the merger or consolidation process
in the bonds.
Regarding the authority to approve bond
issuance plans, in order to be consistent with the
provisions of the Law on Management and Use
of State Capital for Investment in Production and
Business in Enterprises and the current regulations
of the Government Regarding capital mobilization
of enterprises which are not guaranteed by the
Government on the international market, the
draft decree regulates that the issuance of bonds
in the domestic market, apart from the approval
authority as for ordinary enterprises, the issuance
of bonds must be approved by the representative
office of the owner in accordance with the law on
themobilization of capital of state enterprises (Law
on Management and Use of State capital invested
in production and business in enterprises and
guidelines). For bond issuance in the international
market, the bond issuance plan must be approved
by the General Assembly of Shareholders or the
Board of Directors in accordance with the Charter
of the company. For the plan of issuance of
convertible bonds, the plan to issue bonds with
the warrant must be approved by the General
Assembly of Shareholders. For state-owned
enterprises, in addition to the approval authority
as for ordinary enterprises, the bond issuance plan
must be approved by the representative office
of the owner in accordance with the law on the
mobilization of capital of state enterprises.
Regarding the direction of overcoming the
inadequacies of regulations on information
disclosure and reporting, to enhance the openness
and transparency in the mobilization of bonds to
protect investors, to innovate mechanisms and
methods of information disclosure according to
international practice, the draft decree also specifies
the manner and contents of information disclosure,
including: pre-release information disclosure,
issuance results publicity, periodic disclosure,
extraordinary disclosure. At the same time, the draft
decree regulates the establishment of specialized
information pages on the stock market at the
Stock Exchange, thereby contributing to increasing
transparency of the market, protecting investors,
enabling state management agencies to effectively
supervise and monitor the market, and support the
liquidity of the secondary market of bonds.
Apart from the regulations on the direction
of enterprises to issue bonds in depository
organizations, the draft decree prescribes the
responsibilities of the depository organizations
in reporting and supplying information on
bond owners, ensuring the scope of issuance of
individual bonds and providing information on
the repayment of principals and interests of bonds
to the Stock Exchange and management agencies.
In addition to the above amendments and
supplements, experts also proposed to disclose
information at the highest level, especially
information on corporate health, the release to
meet the need to meet each other. The drafting
agency should detail the mechanism for sharing
information from the Stock Exchange with
investors when they have the demand.
References:
1. Natinal Assembly Enterprise Law;
2. Law on management and use of state capital invested in production and
business at enterprises;
3. Natinal Assembly Securities Law;
4. Decree No. 90/2011 on issuance of corporate bonds;
5. Circular No. 211/2012/TT-BTC of the Ministry of Finance guiding the
implementation of a number of articles of the Government’s Decree No.
90/2011 / ND-CP on the issuance of corporate bonds.
