| THE STATE BANK OF VIETNAM ------- | SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness -------------- |
| No.: 04/2010/TT-NHNN | Hanoi, February 11, 2009 |
CIRCULAR
PROVIDING FOR THE MERGER, CONSOLIDATION AND ACQUISITION OF CREDIT INSTITUTIONS
THE STATE BANK OF VIETNAM
Pursuant to the 1997 Law on the State Bank of Vietnam and the 2003 Law Amending and Supplementing a Number of Articles of the Law on the State Bank of Vietnam;
Pursuant to the 1997 Law on Credit Institutions and the 2004 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions;
Pursuant to the 2005 Enterprise Law;
Pursuant to the 2005 Investment Law;
Pursuant to the 2004 Competition Law;
Pursuant to the Government's Decree No. 96/ 2008/ND-CP of August 26, 2008, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;
The State Bank of Vietnam (below referred to as the State Bank) provides for the merger, consolidation and acquisition of credit institutions as follows:
Chapter I GENERAL PROVISIONS
Article 1. Scope of regulation
1. This Circular provides for the merger, consolidation and acquisition of the following credit institutions which are set up and operate in Vietnam:
- Commercial banks;
- Finance companies;
- Financial leasing companies;
- Cooperative credit institutions.
2. The merger and consolidation among cooperative credit institutions comply with the Regulation on the issuance and withdrawal of establishment and operation license of people's credit funds; opening and termination of operation of transaction bureaus, branches, representative offices, transaction offices and transaction points of people's credit funds; division, separation, consolidation and merger
of people's credit funds; and liquidation of people's credit funds under the State Bank's supervision, issued together with the State Bank Governor's Decision No. 24/2006/QP-NHNN of June 6. 2006.
of people's credit funds; and liquidation of people's credit funds under the State Bank's supervision, issued together with the State Bank Governor's Decision No. 24/2006/QP-NHNN of June 6. 2006.
Article 2. Subjects of application
1. Credit institutions specified in article 1 of this Circular.
2. Organizations and individuals related to the merger, consolidation and acquisition of credit institutions.
Article 3. Competence to approve merger, consolidation and acquisition of credit institutions
The Governor of the State Bank (below referred to as the Governor) shall approve the merger, consolidation and acquisition of credit institutions under this Circular and relevant laws.
Article 4. Interpretation of terms
In this Circular, the terms below are construed as follows:
1. Merger of credit institutions means a process in which one or several credit institutions (below referred to as merged credit institution(s) is or are merged into another credit institution (below referred to as merging credit institution) by transferring all lawful assets, rights, obligations' and interests to the merging credit institution simultaneously with terminating the existence of the merged credit institution(s).
2. Consolidation of credit institutions means a process in which two or several credit institution (below referred to as consolidated credit institutions) are consolidated to form a new credit institution (below referred to as consolidation credit institution) by transferring all lawful assets rights, obligations and interests to the ^.consolidating credit institution simultaneously with terminating the existence of the consolidated credit institutions.
3. Acquisition of credit institutions means a process which a credit institution (below referred to acquiring credit institution) acquires all lawful assets, rights, obligations and interests of another credit institution (below referred to as acquired credit institution). After being acquired, the acquired credit institution becomes an affiliate of the acquiring credit institution.
4. Credit institutions involved in a merger include 43 merging credit institution and the merged credit institutions.
5. Credit institutions involved in a consolidation include the consolidating credit institution and the consolidated credit institutions.
6. Credit institutions involved in an acquisition include the acquiring credit institution and the acquired credit institution.
7. The representing credit institution is a merged credit institution which is authorized by the remaining consolidated credit institutions to act as the focal point in settling matters related to the consolidation of credit institutions.
8. Competent body of a credit institution is the body which is competent to decide on the merger, consolidation or acquisition of the credit institution according to the credit institution's charter and current law.
9. Parent credit institution is a foreign credit institution which owns over 50% of the charter capital of a wholly foreign owned credit institution operating in Vietnam.
10. Owner means shareholders (for joint-stock credit institutions), the State (for state-owned credit institutions), capital contributors (for joint-venture credit institutions), the parent credit institution and capital-contributing members (for wholly foreign owned credit institutions) and capital-contributing members (for cooperative credit institutions).
Article 5. Principles on the merger, consolidation and acquisition of credit institutions
1. The principle of agreement:
Credit institutions involved in a merger, consolidation or acquisition shall agree on the settlement of rights and obligations of involved parties in accordance with current law.
2. The principle of customer protection:
Credit institutions involved in a merger, consolidation or acquisition must ensure that the merger, consolidation or acquisition does not affect the interests of customers, especially the interests of depositors of each credit institution involved.
3. The principle of confidentiality:
Members of the Boards of Directors and the Control Boards, directors general and concerned organizations and individuals of credit institutions involved in a merger, consolidation or acquisition shall assure confidentiality so as to ensure stable operation of credit institutions before the merger, consolidation or acquisition scheme is ratified by competent bodies of credit institutions.
4. The principle of information provision:
a/ In the process of performing merger, consolidation or acquisition procedures, the Boards of Directors of involved credit institutions shall promptly, adequately, consistently, truthfully and accurately provide owners of all parties to the merger, consolidation or acquisition and other competent organizations with information on the process of merger, consolidation or acquisition, including information on the financial status, organization and operation of their credit institutions;
b/ Dossiers, documents and advertisements of credit institutions involved in a merger, consolidation or acquisition must be made in a prudent and accurate manner so as to avoid misunderstanding.
5. The principle of making decisions on merger, consolidation or acquisition:
a/ Competent bodies of credit institutions involved in a merger, consolidation or acquisition shall adopt decisions on the merger, consolidation or acquisition according to meeting and voting conditions and formalities prescribed by current law.
b/ Conditions and formalities for meeting and voting to pass decisions on matters related to organization of the consolidation of credit institutions shall be agreed upon by the consolidated credit institutions and specified in the consolidation scheme in accordance with current law.
Article 6. Forms of merger, consolidation and acquisition of credit institutions
1.Forms of merger
a/ A bank, a finance company or a cooperative credit institution is merged into a bank
b/A finance company is merged into a finance company.
c/ A financial leasing company is merged into a financial leasing company.
2. Forms of consolidation
a/ A bank is consolidated with another bank, a finance company or a cooperative credit institution to form a new bank.
b/ Several finance companies are consolidated to form a new one.
c/ Several financial leasing companies are consolidated to form a new one.
3. Forms of acquisition
a/ A bank acquires a finance company or a financial leasing company.
b/ A finance company acquires a financial leasing companies.
Article 7. Consultancy on merger, consolidation and acquisition of credit institutions
Credit institutions involved in a merger, consolidation or acquisition may use consultancy services. Consultancy service providers must satisfy the following conditions:
1. Being an organization licensed to provide finance and banking consultancy services;
2. Refraining from providing consultancy services for several credit institutions involved in a merger, consolidation or acquisition case;
3. Being certified by the Boards of Directors of credit institutions involved in a merger, consolidation or acquisition as having no financial relations which may lead to a conflict of interests with other credit institutions involved in the merger consolidation or acquisition.
Artiste 8. Announcement of merger, consolidation or acquisition
1. Credit institutions involved in a merger, consolidation or acquisition under this Circular shall publish an announcement on at least 3 consecutive issues of a daily printed newspaper which is distributed nationwide.
The announcement must be concurrently posted at the head offices, branches and transaction bureaus of credit institutions involved in the merger, consolidation or acquisition and on the websites of these credit institutions, the State Bank of Vietnam and the Vietnam Banks Association.
2. The announcement must contain essential information as prescribed in the form provided in Appendix 1 to this Circular (not printed herein).
3. Credit institutions involved in a merger, consolidation or acquisition may publish a joint announcement on newspapers.
4. The merger, consolidation or acquisition contract must be sent to debtors and notified to laborers within 15 days after obtaining the Governor's in-principle approval of the merger, consolidation or acquisition of credit institutions.
Chapter II MERGER OF CREDIT INSTITUTIONS
Article 9. Merger conditions
1. Not falling into cases of economic concentration which are banned under the Competition Law;
2. Having a merger scheme with essential contents prescribed in Article 12 of this Circular. The merger scheme must not contravene the merger contract;
3. The charter capital of the merging credit institution after the merger must be at least equal to the legal capital prescribed by current law.
Article 10. Merger order and procedures
1. Credit institutions involved in a merger shall jointly elaborate a merger scheme, a merger contract and the charter of the merging credit institution (for cases in which, after the merger, the charter of the merging credit institution is to be revised). The charter of the merging credit institution after the merger, the merger scheme and the merger contract must be adopted by competent bodies of credit institutions involved. Chairpersons of the Boards of Directors of credit institutions involved shall sign, seal, and take responsibility for the content of, the merger scheme.
2. Credit institutions involved in a merger shall send a document to the competition administration agency to notify the merger or request entitlement to exemption, for cases in which merger is banned under the Competition Law.
3. In-principle approval of merger:
a/ Credit institutions involved in a merger shall jointly compile 5 sets of dossier as prescribed in Clause 1, Article 11 of this Circular to be sent by the merging credit institution to the State Bank (the Banking Inspection and Supervision Agency) for examination and decision;
b/ Within 5 working days after receiving complete dossier sets as prescribed in Clause 1, Article 11 of this Circular, the Banking Inspection and Supervision Agency shall send a document, enclosed with a dossier set, to:
(i) The State Bank's branches in provinces or centrally run cities where credit institutions involved in the merger are headquartered for, on the basis of their management and supervision work in localities and the dossier of application for approval of the merger, evaluating the organization and operation of credit institutions involved and expressing their viewpoints on the merger;
(ii) People's Committees of provinces and centrally run cities where credit institutions involved in the merger are headquartered for giving their opinions on impacts of the merger on the local socio-economic stability and expressing their viewpoints on the merger;
