DECISION

ON COMPULSORY PURCHASE OF SHARES AND CONTRIBUTIONS TO CREDIT INSTITUTIONS UNDER SPECIAL CONTROL

Pursuant to the Law on Government organization dated December 25, 2001;

Pursuant to the Civil Code No. 33/2005/QH11 dated June 14, 2005;

Pursuant to the Law on the State bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to the Law on credit institutions No. 47/2010/QH12 dated June 16, 2010;

At the request of the Governor of the State bank of Vietnam;

The Prime Minister issues a Decision on compulsory purchase of shares and contributions to credit institutions under special control,

Article 1. Scope of regulation

This Decision stipulates the purchase of shares and contributions to credit institutions under special control made by the State bank of Vietnam or other credit institutions appointed by the State bank of Vietnam

Article 2. Subjects of application

1. The State bank of Vietnam (hereinafter referred to as the State bank).

2. Appointed credit institutions.

3. Credit institutions under special control, except for the credit institution of which 100% charter capital is held by the State.

4. The credit institutions requested to participate in the administration.

5. Other organizations and individuals related to the compulsory purchase of shares and contributions to credit institutions under special control.

Article 3. Interpretation of terms

1. Compulsory purchase of shares and contributions means the State bank or other credit institutions appointed by the State bank making contributions to or purchasing shares of credit institutions under special control.

2. Appointed credit institutions are the credit institutions appointed by the State bank to make compulsory purchase of shares and contributions to credit institutions under special control.

3. Contributed credit institutions are the credit institutions under special control that are contributed or have their shares purchased by the State bank or appointed credit institutions.

4. Credit institutions requested to participate in administration are the credit institutions requested by the State bank to participate in administering the contributed credit institutions.

5. Special control means a credit institution being brought under the direct control of the State bank on account of insolvency derived from poor administration.

Article 4. The power to decide the compulsory purchase of shares and contribution

1. The Governor of the State bank shall appoint credit institutions to make contributions or purchase shares, or directly make contributions and purchase shares if such credit institutions fail to meet the conditions in Clause 1 Article 7 of this Decision.

2. A credit institution under special control may make compulsory purchase of shares and contributions if the regulations in Clause 2 Article 149 of the Law on credit institutions are not complied with, or when the State bank finds that the accrued loss of the credit institution has exceeded the actual value of charter capital and the reserve funds of the credit institution under special control written in the latest audited financial statement, and the shutdown of the credit institution under special control may threaten the safety of the whole system of credit institutions according to Clause 3 Article 149 of the Law on credit institutions.

Article 5. Determining actual value charter capital and demand for additional charter capital

1. Based on the result of independent audit of the financial condition, actual values of charter capital and reserve funds during the period of special control or at another time decided by the State bank, the Special Control Board shall request the Governor of the State bank to decide the actual value of charter capital and reserve funds of the credit institution under special control and the necessary additional capital to reach the legal capital and meet the regulations on safety in banking.

2. The Governor of the State bank shall decide the amount of capital contributions or purchase of shares that appointed credit institutions or the State bank need to make, the method of making contribution, purchasing shares, and the time of making contributions and purchasing shares.

Article 6. Method of compulsory purchase of shares and contribution

1. Appointed credit institutions shall make compulsory purchase of shares and contributions in cash or by converting part or all the balance of deposits and loans in credit institutions under special control.

Appointed credit institutions shall use charter capital and reserve funds to purchase shares and make contributions in accordance with law.

2. The State bank shall make compulsory purchase of shares and contributions in cash or by converting part or all balance of special loans and refinancing loans (if any). The State bank may use the debt instruments provided by the State bank to make contributions and purchase shares.

Article 7. Requirements on appointed credit institutions and credit institutions participate in administration

1. Appointed credit institutions must:

a) Have healthy financial condition and sufficient capital to make contributions and purchase shares at the request of the State bank;

b) Meet the requirements of safety in banking;

c) Have internal control and audit systems that comply with the regulations of the State bank;

d) Be capable of administrating and restructuring the contributed credit institutions.

2. The credit institutions requested to participate in the administration must:

b) Have healthy financial condition and meet the requirements of safety in banking;

b) Have sufficient managerial personnel to administer the contributed credit institutions;

c) Have a network of branches nationwide.

Article 8. Policies on supporting appointed credit institutions

Based on the condition of the credit institution under special control, the Governor of the State bank shall consider supporting appointed credit institutions while they are making compulsory purchase of shares and contributions to the credit institution under special control in one of the forms below:

1. Giving refinancing loans.

2. Giving special loans.

3. Some criteria for safety in banking at a level other than that of normal credit institutions may be applied for a certain period of time.

4. Other supporting measures to handle unexpected difficulties.

Article 9. The entitlements and responsibilities of the State bank to compulsory purchase of shares and contributions

1. The State bank is entitled to:

a) Request the credit institution under special control to hire independent audit organizations to asset their finance, determine the corporate value and values of charter capital and reserve funds during the special control or at another appropriate time;

b) Decide the actual values of charter capital and reserve funds of credit institutions under special control based on the audit result, and determine the necessary additional charter capital to meet the requirements of legal capital and regulations on safety in banking;

c) Convene the General meeting of shareholders and the Member assembly to announce the result of independent audit, the decision of the State bank on the financial condition, actual values of charter capital and reserve funds, necessary additional charter capital, compulsory purchase of shares and contributions made by appointed credit institutions or the State bank;

d) Request shareholders to publicly inform the use of shares; restrict the transfer and use of shares and capital contributions to ensure the civil obligations of shareholders, capital contributors, relevant organizations and individuals during the special control and restructuring;

dd) Request credit institutions under special control to transfer the contributed capital, and share capital; request capital contributors, major shareholders, and dominant shareholders of credit institutions under special control to transfer the contributed capital, and shares to the State bank or appointed credit institutions;

e) Appoint other credit institutions to make compulsory purchase of shares and contributions to the credit institutions under special control according to Clause 1 Article 4 of this Decision; appoint and dismiss the organizations that participate in the administrations when the State bank directly make contributions to or purchase shares of credit institutions under special control;

g) Decide the transfer of capital and shares of the contributed credit institutions; purchase shares of appointed credit institutions or the State bank after the operation of contributed credit institutions have returned to normal.

h) Other entitlements defined by law.

2. The State bank is obliged to:

a) Exercise the right to represent state capital in the contributed credit institutions when the State bank makes contributions or purchase shares;

b) Provide guidance on the formulation, approve and supervise the implementation of the plans for restructuring the contributed credit institutions;

c) Provide guidance on holding General meeting of shareholders and the Member assembly to vote for members of the Board of Directors, the Member assembly, and the Control Board; decide the new charter capital and submit it to the State bank for approval;

d) Approve the new charter capital of contributed credit institutions after contributions and share purchase;

dd) Send periodic reports to the Prime Minister on the operation of contributed credit institutions and result of the contributions and share purchase.

Article 10. Entitlements and responsibilities of appointed credit institutions

1. Appointed credit institutions are entitled to:

a) The shareholder’s rights of the contributed credit institutions;

b) Transfer the shares and capital contributions after finishing restructuring the contributed credit institutions;

c) Other entitlements defined by law.

2. Appointed credit institutions are obliged to:

a) Appoint sufficient managerial personnel to participate in the Special Control Board and take on the tasks of the Special Control Board after the Governor of the State bank approves the participation in compulsory purchase of shares and contributions;

c) Appoint personnel to participate in the administration of credit institutions at the request of the Governor of the State bank;

c) Participate in the formulation and implementation of the plans for restructuring the contributed credit institutions;

d) Cooperate with the State bank during the compulsory purchase of shares and contributions and the implementation of the plans for restructuring the contributed credit institutions;

dd) Make and send periodic reports as requested by the State bank.

Article 11. Responsibilities of credit institutions requested to participate in the administration

1. Appoint personnel to participate in the administration of contributed credit institutions at the request of the Governor of the State bank;

2. Participate in the formulation and implementation of the plans for restructuring the contributed credit institutions;

3. Closely cooperate with the State bank during the compulsory purchase of shares and contributions and the implementation of the plans for restructuring the contributed credit institutions.

4. Make and send periodic reports as requested by the State bank.

Article 12. Entitlements and responsibilities of the Board of Directors, the Member assembly of a credit institution under special control

1. The Board of Directors and the Member assembly have all the entitlements and responsibilities mentioned in Article 63, Article 67, and Article 72 of the Law on credit institutions.

2. The Board of Directors and the Member assembly are obliged to:

a) Convene ad hoc General meeting of shareholders and the Member assembly at the request of the State bank;

b) Determine the actual values of shares, capital contributions of each shareholder and capital contributors based on the Decision of the Governor of the State bank on the actual values of charter capital and reserve fund of credit institutions;

c) Cooperate with the Special Control Board in implementing the directives of the Special Control Board and the State bank during the administration, compulsory purchase of shares and contributions;

d) Take responsibility for the risks and damage caused to the credit institution.

3. Within 30 days from the day on which the request of the State bank is received, General meeting of shareholders or the Member assembly must be convened and ratify the documents below:

a) Reports on audit results of independent audit organizations on the finance, actual values of charter capital and reserve funds;

b) The Decisions of the Governor of the State bank on dealing with the finance and violations committed by the credit institution;

c) The methods of compulsory purchase of shares and contributions;

d) Other contents at the request of the State bank.

Article 13. Entitlements and responsibilities of owners, capital contributors, and shareholders of credit institutions under special control

1. Owners, capital contributors, and shareholders of credit institutions under special control are entitled to:

a) Be informed of the results of assessments carried out by independent audit organizations of the finance and actual values of charter capital and reserve funds;

b) Request the Board of Directors, the Member assembly, the Control Board, General Director (Director) to report the issues related to the operation of the credit institution under special control;

c) Request the Control Board to clarify the misconduct of individuals involved and the damage caused by such misconduct;

d) Exercise the rights of shareholders and capital contributors within the proportion of their shares and contributions.

2. Owners, capital contributors, and shareholders of credit institutions under special control are obliged to:

a) Accept the assessment result given by independent audit organizations about the finance and actual values of charter capital and reserve funds;

b) Comply with the requests of the State bank during the special control; implement the plans for restructuring the contributed credit institutions related to the restrictions on the use and transfer of shares and capital contributions;

c) Incur and share the damage incur by credit institutions in accordance with legislation on responsibilities of business owners;

d) Take responsibility for the risks and damage caused to the credit institutions;

dd) Transfer shares and capital contributions to the State bank or appointed credit institutions at the request of the State bank;

e) Participate in the General meeting of shareholders and the Member assembly to ratify the contents within the competence of the General meeting of shareholders and the Member assembly.

Article 14. General meetings of shareholders and the Member assemblies of credited credit institutions

Within 30 days after finishing the compulsory purchase of shares and contributions, the contributed credit institution shall convene a General meeting of shareholders or the Member assembly to ratify the new charter capital, amended charter, to vote for and dismiss members of the Board of Directors, the Member assembly, the Control Board, ratify the restructuring plans and other important issues.

Article 15. Withdrawing capital invested in contributed credit institutions

1. Capital invested in contributed credit institutions shall be withdrawn in the cases below:

a) The operation of the contributed credit institutions has returned to normal in accordance with the restructuring plan;

b) The contributed credit institution is bought, merged or amalgamated into another credit institution after the State bank gives an approval.

2. Part or the whole capital may be withdrawn by transferring shares and capital contributions to new investors in accordance with law; ensure openness and transparency.

3. The Governor of the State bank shall consider accepting the withdrawal of capital invested in contributed credit institutions.

Article 16. Responsibility to cooperate of other agencies and People’s Committees

Within their competence, relevant agencies and People’s Committees shall cooperate with the State bank during the compulsory purchase of shares and contributions in accordance with this Decision, the Law on credit institutions, and current laws.

Article 17. Penalizing violations

Every violation of this decision shall face administrative penalties or criminal prosecution, depending on the nature and severity of the violations.

Article 18. Effect

This Decision takes effect on September 20, 2013.

Article 19. Responsibility for implementation

1. The Governor of the State bank shall provide guidance and organize the implementation of this Decision.

2. Ministers, Heads of ministerial agencies, Heads of Governmental agencies, Presidents of provincial People’s Committees, Presidents of the Boards of Directors, Presidents of the Member assemblies, General Directors (Directors) of credit institutions, relevant organizations and individuals are responsible for the implementation of this Decision./.