In practice, regardless o f the lack o f a statutory regulation, iníormal stock markets have been operated through a number o f caies and even through some vvebsitcs.239 In the absence o f an organized market place, shares o f equitized State enterprises have been traded on unorsanized stock markets since before the time the íìrst trading center was eslablished. Even alìcr the first securities trading center came into existence, such markets remained the places for share transactions o f unlisted equitized enterprises. The iníbrmal markel even seems more altractive to investors than the formal trading center. A recent report reveals that while the stock prices on the tradỉng center tend to decline. those on the free market sharply
r,í Except for tlieir duty to file the annual rĩnancial statement with a Tax Authorily and a Busi ness Registry under Article 93 the E n te rp rise A cl.
S e e Thanh N g o e , "Tlii truong chuim khoan c o the anh Iniong toi nganh Ngan hang nhu the neo?” [Hovv Can a Securities Markel AlYect Banking liukistry?] ( 2 0 0 0 ) 12 Tctp ch i N g a n hang [BunkiniỊ R ưviơwJ 59, 59.
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increase (by the end o f O ctober 2002 the prices rose bv 15-30% compared with those in March 2002); and that the increasing n u m b er o f shareholding companies ịoining the informal stock market has made the m arket m uch busier.240
Small and medium investors in Vietnam are rather familiar with the Cafe Index X House in Ho Chi Minh City vvhere íhey can trade via an electronic board updated on a weekly basis. Frequently quoted securities on sưch a board are confíned within around 10 different types. A co m m en tato r satirically observes,
“Vietnam seem s to fo llo w the w ay that Britain exp e rien ced in the 17th c e n tu ry ” 24ị In such a market place, iníbrmation concernino traded shares cannot be said to be sufficient, even if not actually pooiiy provided. C onsequently, investors are in danger o f bcing exposed to risks, especially w hen a m inim um legal basis for the perform ance o f the OTC market has not yet been made.
F or the time being in Vietnam, the nu m b er o f listed companies remains poor, because a pool oi' equitized enterprises does not meet the statulory requirem ents to have their shares listed, whilst other pools, for some reasons, do not w ant to bc listed on a íormal trading floor (as earlier mentioned). D ecree 48/1998 and other legal rules issued by the s s c merely so v ern transactions over securities issued in public oíTerings or/and listed securities. Obviously, there have heen a huge number o f transactions eíTectcd beyond the scope o f the securities reaulalions, as vvell as the ovcrsiaht o f the ssc. and outside the seciirilies trading center. In practice, the unorganized markel seem s even busier than the organized one. In such a circumstance, an OTC market and a lcs.al lram ework for its operation has become increasingly demanding, or at least, a system o f information discĩosure requirements vvith respect to non-listed com panies should be taken into consideration. Perhaps at present, the only statutory provision, concerning such disclosure, vvhich can bc revoked, is Article 93, the Enterprise Act. This Article requires shareholding companies to nie llic annual lìnancial statement vvith the State a u t h o r i l i e s ( i n c l u d i n g th e r e gi st ry a nd t h e t a x a t i o n a u t h o r i t i e s ) a í t c r s u c h a statem ent vvas approved in a general shareholdcr mecliim. The Article has three Sub-arlicles. Sub-articles one and two read:
Wilhin 90 davs [rom the díitc o f com pletion o f the fis c a l year, shareholding com panies /uivc lu fìỉe the annual Jìnancial
"Gia c o pliieu tren thi truong tu do tang manh" ỊStock Prices in Free Markct Sharply IncreaseỊ. (Oct. 23. 2 00 2 ) hl l p://\\ w\s .v n c x prcss. nct / vi cliianì/kinli-doaiih/cỊniim-khoain visitec!
Oct. 2 4 , 2 0 0 2 . Hereinafter, "Stock Prices OI1 Frcc Markct Sharply Increase” . 1 S e e Ho a n u Quy Vuong, above 11. 2 2 2 , 5 I .
:j: S e e “ Stock Prices in Prec Markct Sharply liicrease", a b o ve 11. 240.
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stalem en t approvecl bv the general s h a r e h o ld e r s ' m eeting w ith a tax autho rity and a registry.
A resum e o f the annuơl fin a n c ia l statem ent m ust be ỷurnished to all com pany shareholders.
A ccording to the language o f this provision, it is not clear vvhen the annual fìnancial statem ent is to be sent to shareholders, before or after the general shareh old ers’ meeting. This is o f importance since, if it reaches shareholders before the meeting, that would help them to cast right and iníbrm ed votes.
Sub-article three m akes the com pany annual ĩinancial statem ent available to all those who show interest in the relevanl company information. In other words, it gives public access to the company annual financial statement. It reads:
E very organization and individual can see or g et a copy o f such a statem enl in the registry office f o r a f e e 24i
Purthermore, organizations and individuals can request the registry to provide them vvilh inibrmation concerning company business registration244 and ordinary shareholders can access the shareholders’ list.245
A ccording to the laiìguage o f Arliclc 93. il is clear that all shareholding com panies lầcc iníbrm ation disclosure duty, vvhich is eoocỉ. Hovvever, such a duty is merely required lo bc discharged on an annual basis. Thus, the Article cannot cnsure public investors oí' limely access to material inlbrmation o f the relevant non-listed com panies w here such companies issue their shares publicly and when their shares are tradcd outside an organized tradine, center.
T o dale, the regukition o f the tce has not been created. Ac c or di ngl y, Article 93.3 the E n te r p r is e A c í has not been impl emented in practicc.
244 S e e E n t e r p r is e A cL Alt. 20. 2.
245 Ibid., Art. 5 3 . 2 . C.
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