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A legal recognition
of the Corporate Groups model in the new UEL will clearly define
the legal rights of parent (holding) companies in their
subsidiaries. The parent company can only exercise the rights of
a shareholder or a holding member in their subsidiaries, and
transactions shall be conducted like those between two
independent legal entities. This not only enables businesses to
develop and diversify their business, but also acts as: i) a
legal framework to govern internal management, ii) to control
and prevent rent seeking behavior; iii) to protect the rights
and interests of minority shareholders and creditors; and iv)
most importantly, to build up the trust of investors.
Mr Nguyen Dinh Cung, Director of Macro Economic Policy
Department,
Central Institute of Economic Management, and member of the UEL
Drafting Committee
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In many countries,
the Corporate Groups model came about as a result of corporate
development, not of law. But in Vietnam this is fairly new
concept, so I think it is a good idea to add a chapter in the
UEL on Corporate Groups, so that they can be effective in
practice. It means that general corporations in the future can
be set up and owned, not only by the State, but also by other
investors.
Mr Ho Xuan Hung, Vice Director,
National Steering Committee for Enterprise Reform and
Development
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 One
of the most important missions of a joint-stock company is to
protect the interest of shareholders. Improving transparent
information disclosure is a key to achieving this. Protecting
the interests of minority shareholders is a must, and there
should be legal provisions sanctioning behavior that violates
the rights of this group of shareholders. Moreover, there should
be a mechanism to enable minority owners to participate in the
decision making of their business. Most private companies
develop their Charters based on the standard form provided in
the Enterprise Law, and including those provisions in the new
UEL would strengthen the degree of compliance in the business
community. The new UEL allows joint-stock companies to
compensate the members of their Board of Directors and Internal
Auditors. Although they can get permanent income from other
sources, a small payment may encourage them to effectively
participate in the company's business. And each company can use
this provision to develop their own compensation policy.
Mr Hoang Quyet Tien, Director, An Sinh Joint Stock Company
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