Increasing power for minor shareholders is among key tasks that market regulators must perform to make the Vietnamese stock market more attractive. — Photo tinnhanhchungkhoan.vn
HÀ NỘI — Officials and business executives have not reached a deal about whether a shareholder with 1 per cent stake can get access to top-secret business information.
Making business information more accessible to all shareholders and investors is one of the key tasks that are expected to help local firms increase capital from the equity market.
In recent years, business transparency has remained a challenge for Vietnamese market regulators to improve the quality of the equity market as individual investors and shareholders are still limited from getting to know their investees deeply and clearly.
It is also among several key reasons why the Vietnamese equity market has not been upgraded to the status of emerging market from that of frontier market by international crediting agencies.
To help minor investors have fair right alongside major shareholders in a business, specialists are finding ways to amend the Law on Enterprises to raise the quality of corporate governance and help Vietnamese firms meet international standards and practices, starting with better protection of shareholders.
Phan Đức Hiếu, deputy director of the Central Institute for Economic Management (CIEM), said that shareholders must be given access to more classified information of the firm.
Under Item 2, Article 114 of the existing Law of Enterprise, classified information is approachable for major shareholders only if they hold at least 10 per cent of the firm’s total shares for six straight months. The amended law could cut the rate to 1 per cent.
“It remains controversial,” Hiếu told a seminar on Tuesday.
Hiếu supported the cut, saying the reduction would help Việt Nam meet international standards set by more developed markets such as the South Korea, where the rate is 3 per cent, and Japan, where the ownership is one share or almost zero per cent stake.
The Law on Securities states that a 5 per cent shareholder with 5 per cent ownership is major. So the two laws are contradictory.
While Hiếu and some other officials were defensive towards the idea, business executives defied it.
If the idea is approved, buying 1 per cent of total shares could rock a business as minor shareholders will have the same power as major shareholders, according to Nguyễn Thanh Việt, chairman of Infrastructure Investment and Transportation Construction JSC (Intracom).
“I agree the rate should be cut, but we should think carefully about how much it will be curbed,” he said, adding the issue could affect one’s secrets.
Meanwhile, Phan Lê Hoàng, deputy general director of Pacific Corporation, said the rate cut may not assure the company is competitive enough on the market as the power may be decentralised.
“It’s right to defend minor shareholders, but we need a par rate level for becoming a major shareholder so that major shareholders still have enough power and responsibility to determine the business operation,” Hoàng said. — VNS