ON TRANSFORMATION OF PUBLIC NON-BUSINESS UNITS INTO JOINT STOCK COMPANIES

Pursuant to the Decree No. 59/2011/ND-CP dated 18 July 2011 of the Government on transforming units with 100% state capital into joint-stock companies; Decree No. 189/2013/ND-CP dated 20 November 2013 of the Government amending and supplementing some articles of Decree No. 59/2011/ND-CP dated 18 July 2011 of the Government on transformation of units with 100% state capital into joint-stock companies;

1. Scope of regulation

a) This Decision provides for the transformation of public non-business units under the management of the Ministries, ministerial organs, governmental organs, People’s Committee of provinces and centrally-run cities, economic group and state-owned corporation into joint-stock companies (hereafter referred to as public non-business units).

b) Where the economic group and state-owned corporations upon equitization, take over the public non-public units, then the transformation of such units into the joint-stock companies shall comply with the provisions in Decree No. 59/2011/ND-CP and Decree No. 189/2013/ND-CP of the Government.

2. Subjects of application

The public non-public units under the management of Ministries, ministerial organs, governmental organ, People’s Committee of provinces and centrally-run cities, economic groups and state corporation are eligible for the provisions in Clause 1, Article 2 of this Decision.

For public non-public units operating the field of health, education and training, promote the activity as per democratic mechanism towards comprehensive autonomy and accounting as enterprises. The association and cooperation are encouraged on the basis of keeping the assets intact and purpose of public services supply. Pilot the management and facility hiring and equitization on the principle of ensuring the continued public services supply with better quality.

1. The public non-business units specified in Clause 2, Article 1 of this Decision shall carry out the transformation into joint-stock enterprises upon meeting all conditions as follows:

a) Self ensure all regular operational expenditures in the year nearest to the time of implementation of transformation or able to self ensure all regular operational expenditures after transformation.

b) Be included in the list of transformation into joint-stock companies under the decision of the Prime Minister.

2. The order, procedures and contents related to the transformation of public non-business units into joint-stock enterprises shall comply with the provisions in this Decision. The contents not specified in this Decision shall comply with the provisions in Decree No. 59/2011/ND-CP and Decree No. 189/2013/ND-CP of the Government and the current guiding documents on transformation of enterprises with 100% state capital into joint-stock companies.

1. Form of transformation

a) Keep intact the existing state capital in the public non-business units and issue more stocks to increase charter capital.

b) Sell a part of the existing State capital.

c) Combine the sale of part of state capital with the additional issue of stock to increase charter capital.

2. Method of initial sale of shares: Public auction, underwriting and direct deal.

1. Domestic investors

a) The domestic investors as Vietnamese individuals and organizations are established and operating under the law of Vietnam (except for cases specified under Point a, Clause 2 of this Article).

b) The domestic investors have the right to purchase shares of the public non-business units that have carried their transformation with unlimited number, except for cases specified in Clause 4 of this Article.

2. Foreign investors

a) The foreign investors include foreign individuals and organizations specified in the Regulation on capital contribution and share purchase of foreign investors in Vietnamese enterprises under the decision of the Prime Minister in each period.

b) The foreign investors are entitled to purchase share of the public non-business units that have carried out their transformation under the provisions of this Decision. The ownership ratio of foreign investors shall comply with the regulations of law on equitization and transformation of state-owned enterprises.

c) The foreign investors wishing to purchase shares have to open their deposit accounts at an organization providing the payment services under the Vietnamese law on foreign exchange.

3 Strategic investors

a) The strategic investors are the foreign and domestic investors with financial capacity, transfer of new technology, training of human resources and with a written commitment of the competent person in the long-term benefit attachment to the unit.

b) Based on the size of charter capital, operational field and requirement for development expansion of the unit, the equitization steering Committee of public non-business units shall formulate criteria for choosing the strategic investors and to request the organ which decides the equitization for approval. A maximum of defined number of strategic investor is 03. The strategic investors must not assign their shares within a period of at least 05 years from the date the units have been issued with the first Certificate of business registration. In special case of assignment of such shares prior to the above period, there must be an approval from the General Meeting of Shareholders.

Where the strategic investor do not comply with their commitments, breaching the prescribed assignment restriction, they shall make compensation for all losses under the contractual commitments and current regulations of law.

c) Principles of defining the share selling price to strategic investors:

- In case of selling shares to the strategic investors after the public auction, the selling price shall be directly agreed with the strategic investors by the equitization steering Committee but not lower than the lowest successful auction price.

- In case of direct agreement or auction between strategic investors who are eligible and have registered for purchase before the public auction, the selling price is the price which is agreed between the parties or the successful auction price but not lower than the initial price approved by the organ having the authority to decide the transformation plan.

4. The members of equitization steering Committee (except for members as representatives of public non-business units), the intermediary financial organizations and individuals of direct consultation, valuation and auction for share sale must not participate in the auction for share purchase initially issued from such units.

1. Equitization consultation

The public non-business units shall hire a consulting organization to identify their valuation upon transformation, development of transformation plan and initial sale of share. The organ having the authority to decide the transformation plan shall choose an equitization consulting organization under regulations of law and guidelines of the Ministry of Finance. The costs of hiring of consultant for transformation shall be included in the cost of equitization.

2. Costs of transformation

The cost of transformation of public non-business units into joint-stock companies shall comply with regulations for transformation of enterprises with 100% state capital into joint-stock companies.

1. After being transformed into joint-stock companies, such units shall operate under the Enterprise Law, the specialized Laws and current regulations of law; continue their supply of public services to the society; decide by themselves on services charge on the basis of price bracket of all reasonable expenses and in accordance with law issued by the competent level.

2. Upon transformation into the joint-stock companies, the units must arrange and use a maximum number of employees at the time of decision on transformation and coordinate with the relevant organs to deal with the benefits of job leaving or severance for employees as prescribed by the Labor Code and other benefits under current regulation; assume all responsibility for their employees transferred from the public non-business units and have the right to recruit and arrange and hire employees.

3. The public non-business units shall, after being transformed into joint-stocks companies, assume the financial obligations and other obligations handed over from the public non-business units transformed into joint-stock companies; take responsibility for monitoring and urging the recovery of debt receivable and debt repayment obligation; be entitled to use all assets and capital handed over for effective business.

4. The public non-business units must coordinate with the relevant organs to inspect and deal with financial issues to valuate their state capital at the official time of transformation into joint-stock companies.

1. When receiving the decision on transformation from the competent authorities, the parent company, economic group or state corporation shall carry out the handover of their assets, capital, land use right, interests, obligations and responsibility associated with their activities to the public non-business units.

2. The public non-business units shall re-make the financial statement and carry out the audit at the time of valuation of their units and submit it to the competent authorities for approval.

3. The public non-business units shall carry out inventory and classification of assets under management and in use; prepare the list of defined quantity, quality and value of existing assets under their management and in their use (including the assets as land use right, patent, scientific research ...); inspect cash fund and compare the banking deposit balance; determine the surplus or deficit compared with that in accounting book.

4. Compare, confirm and classify public debts: The public non-business units shall make comparison, confirmation and classification of public debts and prepare detailed list of each debtor and creditor under the provisions:

a) Debt receivable:

- Comparing and confirming all debts receivable (including due, undue and overdue debts).

- Clearly analyzing bad debts and doubtful debts. The debts receivable which cannot be recovered must have evidencing documents of uncollectibility.

- For the pre-payments to the services and goods supplier such as house rental, land rental, goods purchase and remuneration, they should be compared with contract and volume of supplied services and goods to be included in the value of the transformed public non-business units.

b) Debts payable includes loan, tax and the payables to the state budget: Based on the contract, debit note, make comparison and prepare list of debts with each creditor; define other tax debts and the payable to the state budget; specifically analyse loan debts under contract, current loans, undue loans, overdue loans, original debts, debts with unpaid interests, debts payable but not to be paid.

Other debts payable but not to be paid shall be determined in accordance with the current regulations of the State.

On the basis of result of inventory and audited financial statement approved by the competent authorities, the units shall coordinate with the relevant organs to handle their financial problems as prescribed by law before valuating the public non-business units and the state capital at their units. In case of problems or beyond authority, make a report to the competent authorities for consideration and settlement.

Assets and public debts are handled by the following principles:

1. For lost or diminished assets: The units shall determine the reasons and responsibility of individuals and groups and require compensation as prescribed by law. The difference (if any) between the remaining value of assets and compensation of the relevant individuals and groups are accounted in the operational costs of the units.

2. For the surplus assets, if the reasons cannot be defined or the owner cannot not be found, record the increase of actual value of state capital.

3. For assets without the need to use, undisposed stagnant assets, the units shall establish Committee to carry out the procedures for disposal and sale under regulations. The disposal and sale of assets shall be done through public auction under the current regulation of the State. The revenues and expenses of disposal and sale of assets shall be accounted in the revenues and expenses of the units. Where the time of valuation of public non-business units has come without handling, the authorities having the authority to announce the value of such units shall consider and decide the exclusion from the value of units and make transfer to parent company, economic group or state corporation or the Debt and Asset Trading Corporation for handling under regulation.

4. For public welfare works (kindergarten, nursery and other public welfare assets) invested by reward fund or welfare fund which shall not be included in the value of public non-business units; the joint-stock companies shall assume the management and use for employee’s welfare purposes. For area of house and land allocated as housing for staff, if the conditions are met under the Land Law and its guiding documents, the units shall carry out the procedures for transfer to the local land and house organs for management under the current regulation.

5. Assets used for operation of units invested by the reward fund and welfare fund shall be included in the value of public non-business units and the joint-stock companies shall continue to use them. The joint-stock companies must return the capital corresponding to the value of such assets to the reward fund and welfare fund to be divided to the staff at the time of valuation of units based on the staff seniority.

6. The balance in cash of the reward fund and welfare fund, after offsetting the expenditures exceeding the benefits for staff, shall be divided to the staff at the units at the time of their valuation based on the staff seniority.

7. For debts receivable and payable

a) The debts receivable but uncollectible shall be handled under the current regulations on bad debts.

b) The debts payable but not to be paid shall be accounted as state capital increase at the units.

8. For the fund from the state budget, parent company, economic group and state corporation.

a) To carry out the technological and scientific researches, capital construction investment projects and equipment procurement approved by the competent authorities that are under the progress, unfinished or not yet done: To the time of official transformation into joint-stock companies, the non-business units shall continue to be funded by the state budget or parent company, economic group and state corporation for implementation. Such fund shall be recorded as the increase in state capital invested in the joint-stock companies. The joint-stock companies must adjust their charter capital under the provisions of the Enterprise Law.

b) To provide training and retraining for cadres and official and national target program: the non-business units shall implement it to the time of official transformation to joint-stock companies. The remaining or unused fund shall be transferred to the state budget or parent company, economic group and state corporation. The fund allocated by the state budget shall be finalized under the provisions of the Budget Law.

9. For public non-business units with revenues from the provision fund to stabilize their income but not yet used up to the time of transformation into joint-stock companies, this amount shall be divided to the their staff at the time of valuation of public non-business units based on their seniority.

1. The public non-business units having a total value of assets specified in the accounting books from 30 billion dong or more, or the value of contributed state capital specified in the accounting books from 10 billion dong or more must hire organizations with valuation function as auditing companies, securities companies, foreign and domestic valuation enterprises (referred to as valuation consulting organization) to carry out the valuation consultation for such units.

2. In case of not being the subjects specified in Clause 1 of this Article, the units shall valuate by themselves and make a report to the competent authorities for decision. In case of necessary, such units can hire organizations with valuation function to carry out the valuation.

3. The organ having the authority to decide the transformation plan shall choose the valuation consulting organization under the following principles:

a) For valuation consultation package with value no more than 03 billion dong, the organ having the authority to decide the transformation plan may choose the form of contractor appointment to choose the valuation consultation organization named in the list announced by the Ministry of Finance after the approval of the Prime Minister; in case of required bidding organization, it shall be held under the provisions of law on bidding.

b) For consultation packages not subject to the provisions under Point a, Clause 3 of this Article, organ having the authority to decide the transformation plan shall decide to hold the bidding in choosing the valuation consultation organization under regulation.

4. The valuation consultation organization shall valuate the transformed public non-business units under the provisions in this Decision and must finish it as per time limit and commitments in the signed contract. The public non-business units to be transformed shall fully and honestly provide the relevant information for the valuation consultation organization to use during the valuation.

The valuation consultation organization is responsible for the result of valuation of the public non-business unit to be transformed. Where the result of valuation does not comply with regulations of law, the organ having the authority to decide the transformation plan may refuse to make payment of service charges and if any damage is caused to the state by the valuation consultation organization, such organization shall make a compensation and be removed from the list of organizations eligible for valuation consultation.

5. Valuation consultation charge

The valuation consultation charges shall be agreed upon by the public non-business units to be transformed and the valuation consultation organization based on the bidding result. In case of no bidding, the equitization steering Committee shall discuss with the valuation consultation organization about the charge and submit the result to the organ having the authority to decide the transformation plan for approval.

The method of valuation for the public non-business units which are transformed into the joint-stock companies is the asset method. The grounds for valuation include:

- Decision and record of asset handover from the parent company, economic group or state corporation to the public non-business units to be transformed (if any), financial statements and data in accounting books of the units at the time of valuation.

- Documents of inventory, classification and evaluation of asset quality of the units at the time of valuation.

- Market price of assets at the time of valuation.

- Value of allocated land use right and value of land rental re-determined in case of one-time payment made for the entire duration of land lease.

1. For assets in kind

a) The actual value of assets is equal to (=) the primary cost calculated at market price at the time of valuation multiplied by (x) the remaining quality of assets at the time of valuation

In which:

- The market price is:

+ The price of new assets of the same type under sale and purchase in the market including the transportation and installation fees (if any). If the assets are particular and not traded in the market, the price of asset purchase is calculated as per the price of purchase of new equivalent assets. In case of no equivalent assets, the price of assets recorded in accounting book shall be calculated.

+ Price unit of capital construction and investment unit cost shall be stipulated at the time closest to the valuation for assets as capital construction product. In case of no regulation, the price in the accounting book shall be calculated taking into account the price slippage in capital slippage.

For works with completion of construction investment in the last 03 years, before valuation, the finalization value of works approved by the competent authorities shall be used. In specific case, the works have not been approved by the competent authorities but put into use, the price in accouting book is temporarily calculated.

- The quality of assets is defined by the percentage compared with the quality of assets of the same type newly purchased or newly built in accordance with regulations of the state on safety conditions in use and operation of assets; quality assurance of products, environmental sanitation as guided by the managerial officials of technical and economic sectors. In case of no regulation from the state, the quality of assets as machinery, equipment, means of transportation to be valuated must not be lower than 20% compared with that of assets of the same type newly purchased and 30% of workshop and structures compared with that of assets of the same type newly built.

b) Fixed assets depreciated with full recovery of cost, working tools and managerial devices whose value has been allocated in the business costs but the public non-business units transformed continue to use them. In this case, such assets shall be re-valuated to be included in the value not lower than 20% of newly-purchased assets, tools and devices on the principle.

2. For assets in cash and deposit defined as follows:

a) The cash is defined as per the fund inspection record.

b) The deposit is defined as per the balance compared and confirmed with the bank where the unit has opened its account.

3. The debts payable included in the value is defined as per the actual balance in the accounting book and after compared and processed under the provisions under Point a, Clause 4, Article 7 of this Decision.

4. The expenditures on capital construction investment, costs of unfinished things related to compensation, clearing, leveling and value of land use right shall be determined in accordance with the actual incurrence recorded in the accounting books.

5. The value of long-term and short-term mortgage and collateral is determined as per the actual balance in the accounting book compared and confirmed.

6. The value of intangible assets (if any) shall be determined as per the remaining value recorded in the accounting books.

7. Value for business advantage

The public non-business units shall not have to calculate the value for business advantage (brand name, development potential) in value when making the switch.

8. The value of land use right to be included in the value of transformed public non-business units shall comply with the provisions in Clause 6, Article 1 of Decree No. 189/2013/ND-CP of the Government and other relevant guiding documents.

1. The actual value of state capital at the units is equal to the actual value of the units minus (-) actual debts payable, provision fund for stable income and balance of non-business expenditure source (if any), in which the actual debts payable is the total value of debts payable minus (-) debts not to be paid.

2. The actual value of transformed public non-business units is the value of the whole current assets defined under the provisions of Article 11 of this Decision.

Based on the dossier of valuation of public non-business units prepared by the valuation consultation organization (or by the units themselves), the equitization steering Committee shall verify the order, procedures and the way to valuate the transformed public non-business units under regulation and report to the competent authorities specified in Clause 2, Article 22 of this Decision to issue decision on announcement of value of public non-business units.

The time to announce the value of transformed units must be within 06 months from the time of valuation. In case of exceeding the time limit without value announcement of the units, the competent authorities shall consider and decide the prolonged the time of value announcement but must ensure the principles of value announcement and the organization of initial sale of shares of the transformed public non-business units must be within 12 months from the time of valuation, except for particular cases decided by the Prime Minister.

1. The public non-business units carrying out their transformation are entitled to adjust their announced value in the following cases:

a) There are objective causes (natural disasters, sabotage, change of state policy or any unforeseen cause) affecting the value of units’ assets.

b) After 18 months from the time of valuation but the public non-business units have not carried out their sale of shares, except for particular cases under the decisions of the Prime Minister.

2. The provisions in Clause 1 of this Article only apply to the case where the transformed public non-business units have not carried their sale of shares.

3. The competent authorities shall consider, adjust and announce again the value of transformed public non-business units. The decision on adjustment of value of transformed public non-business units is the ground for formulation of transformation plan.

1. Based on the decision on announcement of value of public non-business units from the competen authorities, the units shall adjust data in accounting books.

2. Within the period from the time of valuation of public non-business units to the time of official transformation into joint-stock companies, such units shall continue to handle their financial problems under current regulations and make financial statement at the time of official transformation into joint-stock companies, in which:

a) For investment in fixed assets and works construction that are unfinished upon valuation of public non-business units but to the time of official transformation into joint-stock companies, such investment is finished and the finalization has been approved by the competent authorities and if there is a difference compared with the time of valuation of public non-business units, such investment may be adjusted as per the approved finalization.

b) The rate of appropriated depreciation of fixed assets is the one registered with tax authorities before valuation of public non-business units.

c) The difference between revenues and expenditures shall be processed under current regulations of the state for the public non-business units.

3. Within 30 days after being issued with the first Certificate of enterprise registration, the equitization steering Committee shall require its assisting group and the public non-business units to complete their financial statements at the time of issue of Certificate, implementation of financial audit; require the tax authorities to prioritize the inspection of tax finalization and other payables to budget (if any); re-define the value of state capital at the time of official transformation into joint-stock companies; make finalization reports on proceeds from equitization, payment of benefits to redundant staff and equitization expenditures.

Where the time to valuate the public non-business units is the previous year and the official time to transform into the joint-stock companies is the next year, then only one financial statement is made without separation of 02 statements at the time of 31st of December and at the time of official transformation into joint-stock companies. The financial statements must be sent to the organs and units as prescribed by law on accounting regulation.

The audited financial statements and finalization dossiers of transformation process (including the proceeds from equitization, payment of benefits to redundant staff and transformation costs) and other relevant documents of the units shall be sent to the organ deciding the transformation and other relevant organs for coordinated inspection and handling of financial problems and approval of financial statement and finalization of transformation process.

4. Within 30 days after receiving the audited financial statement and tax finalization report (if any) of the public non-business units, the organ deciding the transformation is responsible for coordinating with the other relevant organs to carry out the inspection and handling of financial problems and issue decision on approving the financial finalization and finalization of proceeds from the transformation, finalization of transformation costs, finalization of fund for redundant staff assistance and decision on announcing the actual value of state capital at the time the public non-business units are officially transformed into the joint-stock companies as the grounds for handover between the public non-business units and the joint-stock companies.

5. The increase difference between the actual value of state capital at the time of official transformation into joint-stock companies and the actual value of state capital at the time of valuation of public non-business units for transformation shall be transferred to the enterprise restructuring assistance Fund at parent company, economic group or state corporation or the enterprise development restructuring and assistance Fund (for units directly under the Ministry, ministerial organs, governmental organs and People’s Committee of provinces and centrally-run cities).

Where the parent company, economic group or state corporation has been transformed into joint-stock companies, such difference shall be transferred to the enterprise development restructuring and assistance Fund.

In case of incurred reduction difference, the units shall report to the competent authorities to coordinate with relevant organs to inspect, clarify causes, define responsibility of group and individuals and apply handling measures as follows:

a) If due to objective causes (natural disasters, sabotage, change of state policy or other unforeseen causes), the units shall report to the authorities with authority to decide the transformation to consider and determine the use of proceeds from the sale of shares to offset loss after deduction of insurance compensation (if any). Where the proceeds from the sale of shares are not sufficient enough to offset, the competent authorities shall consider throught the General Meeting of Shareholders to adjust the scale and structure of charter capital of the units.

b) If due to subjective causes:

- In case of incurred reduction difference due to not finish the financial problems under the current regulations of law upon defining the value of state capital at the units, it is required to define the responsibility of relevant organs (unit, valuation consultation organ and organ deciding the valuation of transformed non-business units) for material compensation.

- In case of incurred reduction difference due to operation, the management staff of such units shall make compensation for all losses from objective cause under current regulations.

- In case of unforeseen reasons, the persons responsible for compensation are not able to exercise their compensation under the decision of the competent authorities, the remaining losses shall be handled as in case of objective causes as stipulated under Point a of this Clause.

Based on the decision on approving the financial finalization and finalization of proceeds from the transformation, finalization of transformation costs, finalization of fund for redundant staff assistance and decision on announcing the actual value of state capital at the time the public non-business units are officially transformed into the joint-stock companies, the equitization steering Committee shall require such units to adjust their accounting books and prepare handover dossier and organize the handover. The time for handover shall not exceed 30 days after the date of decision on approving the financial finalization at the time of official transformation into joint-stock companies of the units.

The joint-stock companies shall use all of their assets and capital handed over to organize their activities and assume all interests, obligations and responsibilities handed over from the public non-business units and other rights and obligations regulated by law.

The obligations and responsibilities of the public non-business units are defined and supplemented after finalization and handover to the joint-stock companies and such companies shall not take responsibility for such obligations and responsibilities. In case of missing handover that leads to the irresponsibility of the joint-stock companies for assuming debt repayment of the transformed public non-business units, the Director (or Principal, Head of Institute), Chief accountant of the public non-business units and relevant organizations and individuals shall assume the debts repayment.

After 60 days from the date of signing handover record, the joint-stock companies must complete dossiers of assets and land and send them to the competent authorities under regulation to transfer the right to manage and use assets from the public non-business units to the joint-stock companies; allot land, pay land use fees, issue or renew the land use right Certificate under the provisions of the Land Law and its guiding documents.

1. The dossier of handover includes:

a) Document of valuation and decision on valuation announcement of the transformed public non-business units.

b) Financial statement at the time of official transformation into joint-stock companies audited and approved by parent company, economic group, state corporation or the Ministry, ministerial organs, governmental organs or People’s Committee of provinces and centrally-run cities (for units under the management of Ministry, ministerial organs, governmental organs or People’s Committee of provinces and centrally-run cities).

c) Decision on valuation of state capital at the time of transformation into joint-stock companies of the competent authorities.

d) Record of handover of assets and capital made at the time of handover (with the detail of public debts handed over to the joint-stock companies to assume them and financial problems for further handling – if any).

dd) Reports on reality of labor and land use.

2. Handover participants

a) Representative of owner or parent company, economic group, state corporation, Director (or Principal, Head of Institute) and Chief Accountant of transformed public non-business units of the handover party.

b) Chairman of the Board, Director, Chief Accountant and representative of trade union of joint-stock companies are representatives of receiving party.

3. The handover record must bear all signatures of representatives and must specify the reality of assets, capital and employees at the time of handover; interests and obligations and problems which the joint-stock companies shall continue assuming and settle.

1. Based on the result of value of state capital at the transformed public non-business units and the business and production plan of the years after transformation into joint-stock companies, the competent authorities shall decide the transformation plan and scale and structure of charter capital as follows:

a) Where the actual value of state capital at the transformed units is greater than the charter capital necessary for activities of such units after transformation, the competent authorities shall approve the transformation plan and define the adjustment of charter capital as per the practical needs. The difference between the actual value of state capital and the defined charter capital transferred to the enterprise restructuring Fund at the parent company, economic group, state corporation or the enterprise development restructuring and assistance Fund (for units directly under the Ministry, ministerial organs, governmental organs and People’s Committee of provinces and centrally-run cities).

b) In case of issuing more stocks, the charter capital is defined by the actual value of state capital at the enterprises and the value of shares additionally issued by the par value of shares.

2. On the basis of defined charter capital, the organ deciding the transformation shall, based on the actual scale, decide the structure of initial share capital, including:

a) The shares hold by the state as per classification criteria for state enterprises announced by the Prime Minister in each period.

b) The shares sold to the strategic investors and other investors not lower than 20% charter capital. The number of share sold to other investors is not lower than 50% of the above-mentioned shares.

c) The preferential sale of shares to the trade unions at the equitized public non-business units:

The grassroots trade unions are entitled to use the trade union fund to buy the preferential shares but no more than 3% of charter capital and such number of shares must not be transferred. The selling price of preferential shares to the trade unions is equal to the selling price of preferential shares to the employees as stipulated in Clause 1, Article 21 of this Decision.

d) The preferential sale of shares to the employees in the public non-business units shall comply with the provisions in Article 21 of this Decision.

1. In case of sale of state capital

a) The proceeds from the transformation, the units may use to pay the costs of transformation and settlement of redundant employees under regulations of the state as for enterprises with 100% state capital transformed into joint-stock companies and decision of the competent authorities. The remainder (including the difference of sale of shares), after deduction of above expenditures, shall be transferred to the enterprise restructuring assistance Fund at parent company, economic group, state corporation or the enterprise development restructuring and assistance Fund (for units directly under the Ministry, ministerial organs, governmental organs and People’s Committee of provinces and centrally-run cities).

b) Where the proceeds from the transformation are not sufficient to settle the benefits for redundant staff, they shall be supplemented from the enterprise development restructuring and assistance Fund (for units directly under the Ministry, ministerial organs, governmental organs and People’s Committee of provinces and centrally-run cities) or from the enterprise restructuring assistance Fund at parent company, economic group, state corporation (for units under the management of economic group, state corporation. Where the enterprise restructuring assistance Fund at parent company, economic group, state corporation is not sufficient, the enterprise development restructuring and assistance Fund shall give its support.

2. In case of additional issue of stocks to increase charter capital

a) For the proceeds from transformation left at the units with the value corresponding to the number of share additionally issued at the par value; the surplus of capital (difference between the proceeds from the equitization and the total par value of shares additional issued) shall be used for payment of costs of transformation and settlement of benefits to redundant staff. If there is a shortage, such units shall use the enterprise development restructuring and assistance Fund (for units directly under the Ministry, ministerial organs, governmental organs and People’s Committee of provinces and centrally-run cities) or from the enterprise restructuring assistance Fund at parent company, economic group, state corporation (for units under the management of economic group, state corporation. Where the enterprise restructuring assistance Fund at parent company, economic group, state corporation is not sufficient, the enterprise development restructuring and assistance Fund shall give its support.

b) The remaining amount (if any) left for the units in proportion to the shares additionally issued in the structure of charter capital, the remainder (including the difference of selling price of share), after deduction from costs specified under Point a, Clause 1 of this Article, shall be transferred to the enterprise development restructuring and assistance Fund (for units directly under the Ministry, ministerial organs, governmental organs and People’s Committee of provinces and centrally-run cities)

3. In case of sale of state capital in combination with additional issue

a) The proceeds from transformation left at the public non-business units with the value corresponding to the shares additionally issued at par valu, the surplus of capital is used to pay the costs of transformation and settlement of benefits to redundant staff. In case of insufficiency, apply the provisions under Point b, Clause 1 of this Article.

b) The remainder (if any) is handled as follows:

- The value of state share sold at par value shall be transferred to the enterprise restructuring assistance Fund at parent company, economic group, state corporation or the enterprise development restructuring and assistance Fund (for units directly under the Ministry, ministerial organs, governmental organs and People’s Committee of provinces and centrally-run cities)

- The remainder (if any) shall be divided as stipulated under Point b, Clause 2 of this Article.

1. The member Council of economic groups and state corporations is the owner of state capital at the public non-business units under the management of economic groups and state corporations after being transformed into joint-stock companies.

2. The Prime Minister shall decide the representative organ of state capital at the public non-business units under the direct management of Ministry, ministerial organs, governmental organs or People’s Committee of provinces and centrally-run cities after being transformed into the joint-stock companies.

3. The organ as owner of state capital at the public non-business units after being transformed into the joint-stock companies must appoint its representative of the state capital. The person appointed as the representative must meet all criteria as for the representative of state capital at enterprises with 100% state capital transformed into joint-stock companies.

1. Be exempt from registration fee upon transformation of assets under the management and use of the public non-business units into the ownership of the joint-stock companies;

2. Be exempt from fee for issue of Certificate of enterprise registration upon transformation of public non-business units into joint-stock companies;

3. Be entitled to re-sign contract of land, house or structure of state organs under regulations of law on land and assets.

4. Be entitled to maintain and develop their welfare fund in kind such as cultural works, clubs, hospitals, nursing house, nursery to ensure welfare for employees in the joint-stock companies;

5. For public non-business units operating in the area of sciencem technology, vocational training, health, sports and environment, when transformed into joint-stock companies shall continue to be entitled to the application of incentives on scientific and technological activities and policies to socialization encouragement as for enterprises operating in this area before transformation.

1. The employees named in the regular list of the public non-business units at the time of announcement of value are entitled to buy a maximum of 100% shares for each year of actual working in the state sector at a selling price equal to 60% of the lowest successful auction price (in case of public auction first) or equal to 60% of lowest successful selling price to strategic investors (in case of sale to strategic investors first)

2. The employees named in the regular list of the units at the time of announcing the value of the transformed public non-business units and in need of use or having commitment to work at least for 03 years (from the date of issue of first Certificate of business registration) are entitled to buy additional stocks under the following provisions:

a) Additional purchase of 200 stocks for 01 year of commitment to continue to work but not exceeding a maximum of 2000 stocks/1 employee.

For employees as good specialists with highly qualified professional level and persons having applied scientific research and patent working at the public non-business units with commitment to long-term work for at least 05 years (from the date of issue of first Certificate of enterprise registration) may additionally purchase 800 share/1 year of commitment to continue to work but not exceeding a maximum of 8,000 shares for 01 employee. The Ministry managing sector and People’s Committee of provinces and centrally-run cities shall guide and inspect the transformed public non-business units under their management and economic groups and state corporations in formulation of criteria for defining good specialists and highly qualified professional persons in accordance with characteristics of industry and area of operation of the non-business units. These criteria must be unanimously approved by the units’ General Meeting of workers and employees.

b) The selling price of preferential shares to employees additionally purchasing as stipulated under Point a of this Clause is defined as the lowest successful auction price (in case of public auction first) or the lowest successful selling price to strategic investors (in case of sale to strategic investors first)

c) The number of preferential stock additionally purchased of employees, good specialist and highly qualified professional persons and persons having applied scientific research and patent working shall be transformed into ordinary shares after the end of committed time.

In case of transformation of public non-business units leading to the termination of labor contract, job leaving or job loss as stipulated by the Labor Code before the committed time, the number of share additionally purchased shall be transformed into ordinary shares. If the employees wish to sell such number of shares to their enterprises, the joint-stock companies shall purchase them at the price close to the market trading price.

Where the employees terminate their labor contract before the committed time or due to the subjective or unforeseen causes (such as death, loss of working ability...), the joint-stock companies shall pay the amount the employees have purchased the shares after deducting the benefits the employees are entitled from the preferential shares purchased. The joint-stock companies shall keep the above number of shares to sell to the new employees.

3. Be divided the balance in cash of reward fund and welfare fund including the assets used for activities specified in Clause 5 and 6, Article 8 of this Decision to purchase shares.

4. Continue to participate and enjoy the benefits of social security, health insurance and other benefits under the current regulations upon transformation into joint-stock companies.

5. Be entitled to the benefits of pension and other benefits under current regulations if meeting all conditions at the time of announcement of value of public non-business units.

6. The redundant employees at the time of announcement of value of public non-business units shall be entitled to the policies like redundant employees upon restructuring of one member limited liability companies owned by the State.

1. The Prime Minister

a) Approves the list of transformation of public non-business units under the direct management of economic groups and state corporations into joint-stock companies.

b) Approves the list and transformation plan of public non-business units under the direct management of Ministries, ministerial organs, governmental organs, People’s Committee of provinces and centrally-run cities into joint-stock companies under the classification criteria of the Prime Minister.

c) Decides the representative organ of state capital at the public non-business units under the direct management of Ministries, ministerial organs, governmental organs, People’s Committee of provinces and centrally-run cities after being transformed into joint-stock companies as stipulated in Clause 2, Article 19 of this Decision.

2. The Ministers, Heads of ministerial organs, Heads of governmental organs and Chairmen of People’s Committee of provinces and centrally-run cities

a) Submit the list of public non-business units under the direct management of economic groups state corporations to the Prime Minister for approval at the request of the members Council of economic groups state corporations.

b) Review and classify the public non-business units under the direct management of Ministries, ministerial organs, governmental organs, People’s Committee of provinces and centrally-run cities eligible for transformation into joint-stock companies as stipulated in Clause 1, Article 2 of this Decision; submit the list and transformation plan to the Prime Minister for approval recommending the representative organ of state capital owner of at the joint-stock companies.

c) Establish the equitization steering Committee of public non-business units for implementing the transformation in accordance with the provisions in this Decision.

d) Guide, inspect and monitor the course of transformation in accordance with the contents specified in this Decision and other state regulations.

dd) Direct the public non-business units under the direct management of Ministry, ministerial organs, governmental organs or People’s Committee of provinces and centrally-run cities to handle the financial issues, organize the valuation of units, prepare transformation plan, implement the approved plan and announce the value of the transformed public non-business units.

e) Decide the announcement of value of public non-business units and approve the transformation plan for public non-business units under the direct management of economic groups and state corporation.

g) Handle financial problems of the public non-business units under their authority.

h) Take charge and coordinate with relevant organs to appraise and approve the financial finalization, finalization of transformation costs, assistance fund to redundant employees and finalization of proceeds from transformation and announce the actual value of state capital at the time the public non-business units are issued with the first Certificate of enterprise registration.

i) Deal with problems, complaints and denunciations related to the transformed public non-business units under their authority and current regulations of law.

k) The Ministry of Planning and Investment shall coordinate with the Ministries, ministerial organs, governmental organs, People's Committees of provinces and centrally-run cities to build the classification criteria of public non-business units to be submitted to the Prime Minister in the third quarter of 2015.

l) The Ministry of Labour - Invalids and Social Affairs shall issue documents guiding the implementation of the provisions of this Decision relating to its function and duties.

3. The member Councils of parent companies, economic groups, state corporations

a) Review all public non-business units meeting the conditions specified in Clause 1, Article 2 of this Decision for transformation into joint-stock companies, make report to the Ministers of ministries, ministerial organs, Heads of governmental organs, Chairmen of People’s Committee of provinces and centrally-run cities to submit the transformation list to the Prime Minister for approval.

b) Guide, inspect and monitor the course of transformation of public non-business units in accordance with prescribed contents.

c) Direct the public non-business units to handle financial issues and valuate the units, prepare transformation plan and implement the approved plan.

d) Handle financial problems of public non-business units under their authority.

dd) Request the Ministers of ministries, ministerial organs, Heads of governmental organs, Chairmen of People’s Committee of provinces and centrally-run cities to decide the announcement of value of public non-business units and approve the transformation plan.

e) Direct the public non-business units to implement the financial finalization and finalization of proceeds from the transformation, finalization of transformation costs, finalization of fund for redundant staff assistance and define the actual value of state capital at the time the public non-business units are issued with the first Certificate of enterprise registration to be submitted to the Ministers of ministries, ministerial organs, Heads of governmental organs, Chairmen of People’s Committee of provinces and centrally-run cities for appraisal and approval.

4. Powers, responsibilities and composition of transformation steering Committee

a) The transformation steering Committee has the following powers and responsibilities:

- Assist the organ deciding transformation in directing and implementing the transformation of public non-business units into joint-stock companies under the provisions of this Decision.

- Use the seal of the competent authorities during perfomance of duties.

- Establish the assistance Group in implementation of transformation at the public non-business units.

- Direct the formulation of transformation plan and draft of first Charter of the joint-stock companies.

- Direct the transformed public non-business units:

+ To prepare legal dossiers and documents on assets of the units (including house, land); land use plan after transformation, inventory of assets and comparison of public debts at the time of preparing financial statement as prescribed by law.

+ To plan the transformation progress (including the timeline for each step of work) and submit it to the organ deciding the transformation for approval and implementation. Where the progress of transformation is not feasible, the management of units is determined not to complete their duties.

- To verify and request the competent authorities to announce the value of public non-business units and approve the transformation plan.

- To direct the transformed units to coordinate with the intermediary financial organization in sale of share through auction.

- To aggregate and report to the competent authorities on the result of sale of shares.

- To aggregate and request the competent authorities to adjust the transformation plan and adjust the value of public non-business units after being transformed into joint-stock companies.

- To consider, choose, recommend and coordinate with the competent authorities to appoint the representative of state capital contributed at the public non-business units after transformation.

- To submit the labor employment plan (in the transformation plan) after the decision on announcement of value of public non-business units.

b) The composition of the transformation steering Committee of public non-business units shall be decided by the Ministers of ministries and Chairmen of People’s Committee of provinces and centrally-cities with the representatives of parent companies, economic groups, state corporations (for units under the direct management of economic groups, state corporations).

1. This Decision takes effect from 10 August 2015.

2. The public non-business units directly under the independent one member limited liability companies in which the State holds 100% charter capital upon equitization are entitled to apply the provisions in this Decision.

3. The Ministers, Heads of ministerial organs, Heads of governmental organs, Chairmen of People's Committees of provinces and centrally-run cities, Chairman of the member Council, General Director of the economic groups and state corporations, Directors, Principals, Heads of Institutes of transformed public non-business units are liable to execute this Decision. /.