INFORMATION DISCLOSURE OF MAJORITY SHAREHOLDERS

Majority shareholders are the people who have a certain influence on the existence and operation of the enterprise, derived from the right to participate in corporate governance from the number of voting shares held. According to the current provisions of Securities Law of Vietnam, majority shareholders must execute the obligations of information disclosure on important information, related to securities transactions or active positions in the company, ensuring transparency of the securities market.

1.            What is majority shareholder?

A majority shareholder means a shareholder that holds at least 5% of the voting shares of an issuer. Therein, An issuer means an organization that that offers, issues securities.

Majority shareholders are one of the subjects executing the obligations of information disclosure according to the provisions of Law on Securities.

2.            Principles of information disclosure by majority shareholders

–           Information disclosure must be adequate, accurate and timely.

An individual’s personal information, including citizen identity card, ID card, military ID card, unexpired passport, contact address, permanent address, telephone number, fax number, email, number of securities trading account, number of securities depository account, number of bank account, and trading code of foreign investor or business entity of which over 50% of charter capital is held by foreign entities, shall be disclosed if agreed by that individual.

–           The disclosing entities are legally responsible for the information they disclose. In case of changes to disclosed information, the disclosing entity shall promptly and adequately disclose the changes and reasons for those changes.

–           When disclosing information, the disclosing entities shall simultaneously send reports on information disclosure, including adequate information as prescribed, to SSC and SE at which the securities are listed or registered.

–           An organization’s information shall be disclosed by its legal representative or attorney-in-fact.  An individual’s personal information shall be disclosed by himself/herself or his/her attorney-in-fact.

–           Disclosing entities shall retain the information disclosed or reported as prescribed:

+          Information periodically disclosed and information about registration of public companies must be retained in the form of hard copy (if any) and soft copy for at least 10 years. These information must be retained and accessed on the website of the disclosing entity for at least 05 years;

+          Information disclosed on ad hoc basis or on request or other activities must be retained and accessed on the website of the disclosing entity for at least 05 years.

>> SHAREHOLDERS, GENERAL SHAREHOLDERS OF A PUBLIC COMPANY https://linconlaw.vn/shareholders-general-shareholders-of-a-public-company/

>> HANDLING LABOR DISCIPLINE WITHOUT INTERNAL LABOR REGULATION? https://linconlaw.vn/handling-labor-discipline-without-internal-labor-regulation/

3.            Cases of information disclosure by majority shareholders

Majority shareholders who are subject to information disclosure include organizations, individuals, groups of related people, and groups of related foreign investors in the following cases:

a.         Information disclosure when becoming or no longer a majority shareholder of a public company or public securities investment company.

Organizations and individuals, when becoming or no longer being majority shareholders of a public company or public securities investment company, must disclose information and report on transactions to the public company or the securities investment fund management company, State Securities Commission and Stock Exchange (for securities listed, registered for trading).

Implementation time limit: 05 working days from the date of becoming or no longer being a majority shareholder.

b.         Information disclosure when there is a change in the number of shares owned over the threshold of 1% of the voting shares in a public company or public securities investment company.

Majority shareholders of public companies and public securities investment companies, when there is a change in the number of shares owned over the threshold of 1% of voting shares, must disclose information and make reports to public companies, securities investment fund management companies, the State Securities Commission and the Stock Exchange (for listed stocks, registered for trading).

Implementation time limit: 05 working days from the date of the above change.

c.         Information disclosure by related persons of majority shareholders

The information disclosure regime in sections a and b above also applies to:

–           Group of related people owning 5% or more of the voting shares in a public company or public securities investment company;

–           Investors and groups of related people own 5% or more of fund certificates in a close-ended fund;

–           A group of related foreign investors owning 5% or more of the voting shares in an issuing organization or 5% or more of the fund certificates in a closed fund, based on the total number of shares and closed-end fund certificates held by that group of foreign investors.

d.         Note

–           The beginning and ending time of becoming a majority shareholder or the time of changing the securities ownership ratio above the 1% threshold above is calculated from the date of the securities transaction completion.

–           The information disclosure regime is not required to apply to entities not actively conducting transactions in the event of a change in the holding ratio of voting shares arising from a public company repurchasing shares of itself or a public company issuing additional shares; or other cases as prescribed by law.

–           Public companies must make announcements on the company’s website within 03 working days after receiving the report related to the change in securities ownership ratio of the subjects specified above.