Sunday, December 11 2016

VietNamNews

Coffee legal decision unclear

Update: July, 19/2016 - 09:00
A Trung Nguyen coffee shop. Trung Nguyen operates a nationwide chain of coffee shops in Viet Nam and has granted franchises in other countries. — Photo cafebiz.vn
Viet Nam News

HÀ NỘI — A change in the legal representative of Trung Nguyên Coffee Corporation JSC will not have “a decisive impact” on operations of the firm, said lawyer Trương Thanh Đức.

The lawyer from BASICO Law Firm made the judgement in front of local press after public reports said Chairman Đặng Lê Nguyên Vũ had “lost control” of the instant coffee company to his wife, Lê Hoàng Diệp Thảo.

Last week, the Planning and Investment Department of the southern Bình Dương Province named Thảo as the legal representative of the firm, after rescinding an earlier decision issued in April that named Vũ as the representative.

Đức said that in practice, a legal representative does not mean a person who governs a company since the law does not stipulate functions and tasks for a legal representative.

Such functions and tasks are always attached to specific titles such as chairperson or director, in accordance with the Enterprise Law.

This law states that a legal representative is the company chairperson or general manager, who is authorised to represent the company and make important decisions on business operations, human resources, bank accounts and the company seal.

Rights and responsibilities of a legal representative are stipulated in the charter of the company, and a company may have more than one legal representative, according to the current law.

"Only the management board has real power because it has the right to appoint or dismiss the legal representative of a company," Đức said.

At present, the management board of Trung Nguyên Coffee reportedly has three members; Thảo, Vũ and a representative of the Trung Nguyên Group.

Their stakes in the coffee firm are 5 per cent, 10 per cent and 85 per cent, respectively.

Đức said that, to be exact, the Trung Nguyên Group representative with such a controlling stake should have the “decisive right for everything.” The representative has the right to vote for 85 per cent of management board members and decide who are the chairman and general director of the coffee firm.

Thus, the change in the legal representative of Trung Nguyên Coffee only has a sense of procedure. It does not mean any group of people are losing power and the rights of management, according to Đức.

However, Đức said what had been announced remained limited and more information would be required to know exactly what is going on at the company.

Last week’s decisions of the Bình Dương department were based on a request issued in May by the People’s Supreme Court in HCM City, which is in the process of ruling on the divorce between Vũ and Thảo. — VNS

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