Since the end of 2018, the Commission for the Management of State Capital at Enterprises (CMSC) will become the new Owner Representative Agency (Cơ quan đại diện chủ sở hữu) of 19 large SOEs including State Capital Investment Corporation (SCIC), Petro Vietnam (PVN), Vietnam Electricity (EVN), Vietnam National Petroleum Group (Petrolimex). This change causes some SOEs to have CMSC as the common Owner Representative Agency, which may cause these SOEs to become related persons according to the Enterprise Law 2014, because:

·       Under Article 4.17 of the Enterprise Law 2014, a related person of an SOE (First SOE) means (i) any organization or individual; and (ii) such organization or individual relates directly or indirectly to the First SOE in the cases prescribed by Article 4.17(a) to 4.17(h) of the Enterprise Law 2014;

·       Being regarded as a legal person (pháp nhân) under Article 76.2 of the Civil Code 2015, the CMSC is considered as an organization able to control the decision-making process and operations of the First SOE through the management body of the First SOE. Therefore, CMSC is the related person of the First SOE under Article 4.17(c) of the Enterprise Law 2014; and

·       According to Article 4.17(g) of the Enterprise Law 2014, all enterprises (i.e., another SOEs) in which CMSC owns at a level entitling CMSC to control the decision-making process of the management bodies are considered as related persons of the First SOE.

Under the banking regulations, “companies having the same parent company or the same parent credit institution” are related persons. Since CMSC is not a company or a credit institution, therefore, it is not clear if SOEs under control of CMSC are related persons under banking regulations. If these SOEs are considered as related persons under the banking regulations, then these SOEs may be subject to stricter single lending limits under the banking regulations.

This post is written by Ha Kieu Anh and edited by Nguyen Quang Vu.