The
recent arrests of three former directors of ACB, one of the largest private
commercial joint stock banks, have demonstrated that how vulnerable a director
(or former director) of a public company is exposed to criminal liability when
the law is enforced. The Vietnamese Penal Code contains a number of crimes that
may be relevant to the activities of a director of a public joint stock company
including:
·
A
person who unintentionally causes
damage to another person’s property valued at VND 50 million or above may be
subject to a criminal penalty. Arguably, this provision can be used against a director,
who makes a decision resulting in loss for the public joint stock company even
if such director can prove that his/her decision is made with good faith and
for the best interest of the public joint stock company when it was made.
·
If
a person (1) knows information relating to a public company which has not been
disclosed and if disclosed would affect materially the price of the public
company’s securities, (2) uses such information to trade securities or provides
such information to other persons or advises other persons to trade securities
on the basis of such information and (3) gains large illegal profit then such
person may be subject to a criminal penalty. This provision can be used against
a director who violates the insider trading restriction under Vietnamese law.
·
A
person who commits various money laundering activities may be subject to
criminal liability of up to 5 years or 15 years in serious cases. Monies
laundering activities include, among other things, (i) directly involving in
financial transactions intended to conceal the illegality of monies or assets
obtained from criminal liability, (ii) using monies or assets obtained from
criminal liability for business activities or other activities, and (iii)
conceal information regarding original, nature or movement of monies or assets
obtained from criminal liability.
·
A
person who is directly responsible for managing State property but neglects that
responsibility causing damage to the State’s property valued at more than VND
50 million may be subject to criminal penalties. This provision could be used
against a director of a public joint stock company in which the State owns
certain shares.
·
A
person who abuses his/her positions
and/or powers to deliberately act against the State’s regulations on
economic management, causing a loss of more than VND 100 million may be subject
to a criminal penalty.
·
A
person who negligently fails to perform an assigned task and causes serious
consequences may be subject to a criminal penalty.
· The Penal Code
imposes criminal liability on the act of receiving bribes, which is defined as
an act, among others, of a person who holds an official position or power and
directly or indirectly has received or will receive money, properties or other
“material benefit” in any form, which has a value of VND 2,000,000 (approx.
USD100) or more “with the intent of taking advantage of his/her official
position or power in order to perform or refrain from performing certain acts
for the benefit of, or as requested by, the person who offers the bribe”.
The crimes listed
in the last four bullet points above in principle should apply only to those
who are State officials under the Law on State officials or those who are otherwise
entrusted with State power. However, in practice, Government authorities have
applied these provisions to staffs or personnel of companies especially
State-owned companies. In case a Public joint stock company is a private
company, the possibility that these provisions may apply to the company’s staff
and personnel is lower than with respect to State-owned companies. However, one
cannot rule out the risks from these provisions. If the
report on the recent arrest of a construction engineer by Vietnamese police
on the ground of bribery action taken by the engineer is correct then such
arrest now seems to confirm that the anti-bribery provision under the Penal
Code also applies to private companies at least from the police’s point of view.