Shareholders left out of the loop

For example, Kim Thach Joint Stock Company (Kim Thach) investors claimed that they had not received any information about the company’s business operations for years, as the company’s board of directors had not organised annual general shareholder meetings (GSM) for 2008 and 2009.

“Without a GSM, how can I know what’s going on with my capital contributions? Are they lost? It is really a concern,” a Ho Chi Minh City-based investor of Kim Thach told VIR.

Kim Thach’s chairman Le Hoang Duong admitted that investors’ complaints were true, but due to numerous difficulties after equitisation, the company’s responsibility [for organising GSMs] to satisfy investors’ demands had not been realised.

“As the company is trying to avoid bankruptcy, we have no time to think of organising a GSM. However, we will fulfill our responsibilities by sending a letter to investors to inform them of the company’s current situation,” said Duong.

Nguyen Binh Lu, an investor, said that he had bought 20,000 Vinh Tien Joint Stock Company shares since 2003, but did not get any information or dividends from the company. “I asked, but the company director was not available. The chief accountant asked to buy my shares back at face value [VND10,000 each] and refused to provide any more information,” said Lu.

Nguyen Tuan Minh, a Hanoi-based investor, said that in 2006 he purchased shares of SaraMedia, an affiliate of the Hanoi Stock Exchange-listed Sara Group (SRA). After a shareholder meeting in 2008, he and many other retail investors received no further information about the company’s operations.

“We have contacted the company directors several times but we are still not satisfied. We feel cheated,” said Minh.

A Ho Chi Minh City-based investor in the Tri Viet Automatic Technology Company said that he had bought the company’s shares, but had not received any relevant information, as the company had not organised GSMs for two consecutive years, since 2008.

“This year, the company’s board of directors’ term will end, but I don’t know who will continue working, or whether the company will select a new director legally or not,” he said.

Tran Phuong Bac, a lawyer with Viet Law firm, said that according to Enterprise Law, joint stock companies had to organise GSMs at least once a year within six months after its fiscal financial year. If violations were found and these companies failed to organise GSMs, they could be fined up to VND10 million.

“Investors can send complaints to their local planning and investment departments, asking authorities to dole out stricter punishments and force the companies to organise GSMs as regulated,” said Bac.

Bac added that investors could also sue these companies, demanding the courts to force the companies to organise GSMs and compensate for any losses.