What is a share auction?

Pursuant to Clause 6, Article 3 of Decree 126/2017/ND-CP, it is explained that a share auction is a form of selling shares of a business. publicly equitized enterprises for subjects with price competition.

Can an organization conducting a share auction be able to buy shares issued for the first time in an equitized enterprise?

Pursuant to Point d, Clause 4, Article 6 of Decree 126/2017/ND-CP, supplemented by Point a, Clause 3, Article 1 of Decree 140/2020/ND-CP as follows:

Objects and conditions for buying shares

1. Domestic investors are entitled to buy shares of equitized enterprises in unlimited quantities, except for the cases specified in Clause 4 of this Article.

2. Foreign investors have the right to buy shares of equitized enterprises in accordance with the provisions of this Decree and relevant legal documents.

Foreign investors wishing to buy shares must open an account at a credit institution in accordance with Vietnamese law on foreign exchange.

Foreign investors are allowed to deposit and deposit in foreign currency by transfer when participating in the auction to buy shares and shares. The capital of the enterprise is 100% charter capital held by the State in accordance with the provisions of Vietnamese law on foreign exchange and the guidance of the State Bank of Vietnam.

3. Strategic investors:

a) Strategic investors are domestic investors and foreign investors who meet the following conditions:

– Have full legal status according to the provisions of law;

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4. Organizations and individuals who are not allowed to buy shares issued for the first time of an equitized enterprise include:

a) Members of the Steering Committee, the Enterprise Equitization Support Team (except for members who are representatives of the enterprise);

b) Intermediate financial institutions and individuals belonging to these organizations participating in equitization consulting, financial statement auditing and auditing agencies. enterprise value determination (except for underwriting organizations that purchase undistributed shares under the guarantee contract);

c) Subsidiaries and affiliated companies within the same Group, Corporation and parent company – subsidiary combination;

d) Organizations conducting share auctions and individuals of this organization involved in the auction;

dd) Related persons as prescribed in Clause 17, Article 4 of the Enterprise Law of the year 2014 of organizations and individuals specified in Points a, b and d of this Clause.

Thus, according to the above regulations, the organization conducting the share auction is not allowed to buy shares issued for the first time of the equitized enterprise.

When preparing documents for the initial public offering of shares, what documents must the equitized enterprise prepare at the same time?

Pursuant to Clause 2, Article 11 of Decree 126/2017/ND-CP, amended by Clause 5, Article 1 of Decree 140/2020/ND-CP, Clause 1, Article 3 Decree 140/2020/ND-CP as follows:

Implementing information disclosure and transparency and listing on the stock market

…

2. When preparing the initial public share auction dossier, the equitized enterprise must also prepare the depository registration dossier and the trading registration dossier on the stock market. Listing at the Stock Exchange is carried out after the equitized enterprise converts into a joint stock company and meets the listing conditions according to the provisions of securities law.

3. Within a maximum period of 90 days from the date of completion of the public stock offering, the equitized enterprise must complete stock deposit registration procedures at the Vietnam Securities Depository Center and register for trading on the Upcom trading system.

4. (Repealed).

5. The owner’s representative agency regulates equitization at the same time as listing on the stock market in the equitization plan to announce to investors before selling shares for the first time.

In case the enterprise is equitized and simultaneously listed on the Stock Exchange, the owner’s representative agency decides on the minimum volume of shares ordered for the number of shares sold to the public in the initial share issuance plan for the enterprise to later When equitized, it is eligible for listing. Regulations on the minimum subscription level in the initial share issuance plan do not discriminate between investors of all economic sectors.

Thus, according to the above regulations, in addition to the initial public share auction dossier, the equitized enterprise must simultaneously prepare a depository registration dossier and a trading registration dossier on the stock market.