VietNamNet Bridge – The merger and acquisition (M&A)
affairs which successfully wrapped up recently all witnessed the deep
intervention of the state management agencies. It is because Vietnam still does
not have a perfect legal framework for the bank M&A activities.
“Vietnam is lacking the legal
framework for this issue,” said Lawyer Tran Minh Hai, Director of Basico, a law
firm.
How were the bank M&A deals
carried out, then? According to Hai, there are at least eight laws which
comprise the provisions relating to the M&A, and tens of legal documents
promulgated by the government and ministries, guiding the implementation of the
laws.
However, these are just general
provisions which cannot show in details what to do in specific cases.
Therefore, to date, the bank
stake transfer deals have been carried out with the intervention of the state management
agencies and on the basis of mutual negotiations. However, every case of stake
transfer applies a specific mechanism.
Truong Thanh Duc, Head of the
Legal Division of Maritime Bank, said every promulgated legal document can be
applied for some cases only, while the provisions would be no more suitable in
the future.
Duc said the existing legal
documents just can show the procedures the involved parties have to follow,
while they still cannot clarify many other issues. This is one of the reasons explaining
why the restructure deals at some banks have still got stuck.
A lot of questions have been
raised and answered, relating to the stake transfer procedures, the
responsibilities of the involved parties, the management role of the involved
parties after the stake transfer deals, the bank valuation and post-M&A
issues.
At present, no one can say for
sure if M&A is a kind of direct or portfolio investment, and what
regulations to cover what kinds of M&A affairs
In June 2012, the State Bank of
Vietnam put the draft circular guiding the merger and acquisition of credit
institutions for public opinion. However, the legal document has not come out
yet, while nothing new has been heard since then.
Hai said that it is necessary to
clarify what the bank “takeover” and “merger” mean. The currently valid
Enterprise Law also does not comprise a clear definition about bank merger.
Therefore, the concept has been understood simply as the action of transferring
bank stakes, which leads to the changes in the ownership ratios and the roles
of the shareholders in the bank management.
A banker said with the current
regulations, the small shareholders can transfer stakes without having to
inform about the transfer deals. The “small shareholders” are understood as the
individuals with the ownership ratio of less than five percent. However, the
banker said, one or two percent of stakes in the banking sector should be seen
as a big asset.
In many cases, the shareholders
of banks do not know who are the real owners of the banks, even though banks
all are public companies as stipulated by the laws. It is because the banks
have changed hands many times.
A big shareholder of a bank said
one day he asked a member of the board of directors why he was so powerful, if
he held only one percent of stakes. The shareholder was given the explanation
that the member of the board of directors had got the authorization of other
shareholders to represent 51 percent of the stakes of the bank. Meanwhile, the
shareholder did not have any information about that.
Compiled by Kim Chi
Business & Investment Opportunities
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