The Government issues a Decree on conditions for private offering of shares.
The Government issued a Decree detailing and guiding the implementation of a number of articles of the Securities Law and the Law amending and supplementing a number of articles of the Securities Law, which specifically stipulates the conditions for private offering of shares.
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Accordingly, the subjects of private offering of shares are joint stock companies established and operating under the Law on Enterprises and relevant legal documents; limited liability companies offering private shares to convert into joint stock companies.
The private offering of shares by a non-public joint stock company must satisfy two conditions: 1- There must be a decision of the General Meeting of Shareholders approving the private offering plan and the plan for using the proceeds from the offering; 2- Satisfying other conditions as prescribed by specialized laws in case the issuing organization is an enterprise in a conditional business sector or industry.
The private offering of shares to convert from a limited liability company to a joint stock company must also ensure two conditions: 1- There is a decision by the owner or the Board of Members approving the private offering of shares for conversion; 2- Meeting other conditions as prescribed by specialized laws in case the issuing organization is an enterprise in a conditional business sector or industry.
The Decree also clearly states that the issuing organization and other related organizations and individuals are not allowed to advertise the offering in the mass media. The information disclosure must not contain advertising content or solicitations to buy shares offered for private sale.
Prohibited transactions
In particular, the Decree stipulates prohibited transactions including insider trading, stock market manipulation transactions and a number of other prohibited transactions.
Specifically, prohibited insider trading includes the following acts: Using inside information to buy and sell securities for oneself or for others; unintentionally or intentionally disclosing or providing inside information or advising others to buy or sell securities based on inside information.
Prohibited stock market manipulation transactions include the following transactions: Using one or more of one's own or other people's trading accounts or colluding with each other to continuously buy and sell securities to create artificial supply and demand; continuously buying or selling securities with a dominant volume at the time of market opening or closing to create a new closing price or opening price for that type of security on the market;...
In addition, other prohibited transactions include: Organizations and individuals directly or indirectly committing acts of fraud, deception, creating false information or omitting to disclose necessary information about a security, causing serious misunderstandings and then buying or selling that security for profit; securities companies changing the priority order for customer orders;...
This Decree takes effect from September 15, 2012 and replaces the following Decrees: Decree 14/2007/ND-CP dated January 19, 2007 detailing the implementation of a number of articles of the Securities Law, Decree 84/2010/ND-CP dated August 2, 2010 amending and supplementing a number of articles of Decree 14/2007/ND-CP and Decree 01/2010/ND-CP dated January 4, 2010 on private offering of shares.
According to (Chinhphu.vn)-LT
