VietNamNet Bridge – The work of declaring death for securities
companies would be accelerated to go at a highest ever speed, commencing from
this month.
The “purification campaign” gears up
Just three days after the
Circular No. 165 took effects, the stock market witnessed another securities
company put under the special control by the watchdog agency. This spells that
the company is likely to leave the market soon.
On December 4, the State
Securities Commission (SSC) released the Decision No. 1058, stating that it
puts SME Securities Company under the special control from December 4, 2012 to
April 4, 2013.
SME Securities has become the
first company put under the special control in accordance with the Circular No.
165 which took effects on December 1, 2012.
In the past, a company would be
put under the special control only if it could not meet the requirements on
financial safety indexes.
As a result, a lot of companies
escaped from the SSC’s special control simply by neglecting their duties of
submitting their financial reports. Since SSC did not receive reports to
consider the “health” of the companies, it could not make any decisions which
may cause negative impacts them. SME Securities was one of them.
This explained why only seven
securities companies were put under the special control last year. The number
of the companies was really modest, if noting that the majority of securities
companies reported losses in the last many consecutive quarters. Especially, a
lot of them reportedly incur losses for the last many years, deep in debts or
have stopped operation in reality.
The seven companies include TAS,
SBS, VIG, RUBSE, Mekong, Truong Son and HSSC. Of these, three have been
suspended because they could not successfully improve the situation to escape
from the special control.
However, the Circular No. 165 has
set up stricter requirements to impose a stricter control over the performance
of securities companies.
Under the new legal document, a
company would be put under the special control if it does not submit the report
on its financial safety situation for the two consecutive periods, or it does
make public the information about the audited or checked finance reports about
which auditing firms gave negative comments or refused to give comments.
With the new regulation, the
duration to be put under the special control has been shortened to four months
instead of six. This means that a company would be forced to suspend or stop
operation if it cannot improve the situation after four months--since the day
it is put under the special control and has the accumulative loss equal to 50
percent of its chartered capital or higher.
Vietnam’s stock market doesn’t need so many securities companies
Experts said if referring to the
provisions of the Circular No. 165, nearly 100 companies out of the 105
licensed companies would be eliminated.
The Circular No. 165 with strict
requirements is believed to be the door that many securities companies cannot
go through.
Analysts have warned that the
majority of the operational companies would disappear from the market, if the
strict regulations are applied. However, the watchdog agency seems to keep its
determination to cut down the number of the companies by 70 percent.
Especially, a senior official
from SSC has revealed that the duration for the special control, which has been
shortened from six months to four months, would be cut to one month or 10 days
only.
Manh Ha
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Health care and Life Science with expertise in ASEAN 's area. We are currently changing the platform of www.yourvietnamexpert.com, if any request, please, contact directly Dr Christian SIODMAK, business strategist, owner and CEO of SBC at christian.siodmak@gmail.com. Many thanks.
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