Delisting Shares of a Public Company on Vietnam Stock Exchange

1. Compulsory delisting

Compulsory delisting consists of the following:
• The institution listing the securities on the Stock Exchange failed for a one year period to satisfy the listing conditions;
• The listing institution itself suspends its main business and production activities, or such activities are suspended, for a one year period or longer;
• The business registration certificate or operational license for the specialized industry or line of the listing institution is revoked;
• There is no share trading on the Stock Exchange for a period of twelve (12) months;
• Business and production suffers a loss for three consecutive years, or total accumulated losses in the most recent audited financial statements exceed paid-up charter capital;
• The listed organizations ends its operations or fails to meet listing requirements due to merger, acquisition, division, splitting, dissolution or bankruptcy, or is subject to the issuing company’s offering and issue of more than 50% of outstanding shares for the purpose of swapping them for shares or contributed capital in other enterprises; the securities investment fund terminates its operations; the listed organization fails to meet statutory requirements for becoming a public;
• Bonds reach their maturity date or all listed bonds are redeemed by the issuing organization prior to maturity;
• The auditors refuse to conduct an audit of, or disagree with or refuse to provide an opinion on the most recent financial statements of the listing institution;
• The listing institution is in breach in that it was late in lodging annual financial statements for a period of three (3) consecutive years;
• The State Securities Commission or the Stock Exchange discovers that the listing institution falsified its application file for listing, or such file contained seriously incorrect information affecting investors’ decisions; and
• The listing institution is in serious breach of its obligation to disclose information, or there are other circumstances in which the Stock Exchange or State Securities Commission considers it is necessary to require delisting to protect investors’ interests.

2. Voluntary delisting

Conditions for delisting shall comprise the following:
• A listing organization is only permitted to delist its securities when there is a decision of the general meeting of shareholders passed by at least 51% of the voting shareholders who are not major shareholders, consenting to the delisting; and
• A listing organization is not permitted to delist within the two year period from the date the listing was implemented on Stock Exchange.
An application file requesting voluntary delisting shall comprise:
• Request to be delisted;
• Decision on delisting shares passed by the general meeting of shareholders, or decision on delisting bonds passed by the board of management or in a case of convertible bonds by the general meeting of shareholders (in the case of a shareholding company); decision on delisting bonds passed by the members’ council (in the case of a multiple member limited liability company) or by the company owner (in the case of a single member limited liability company), or decision on delisting securities investment fund certificates by the general meeting of investors or decision on delisting shares passed by the general meeting of shareholders of the public securities investment company; and
• Benefit sharing plan for shareholders, creditors and investors.

3. Delisting procedures

In accordance with Listing Regulations of Stock Exchange (Decision 85/QĐ-SGDHCM dated 19 March 2018, amended by Decision 295/QD-SGDHCM dated 30 July 2019.).

a. Compulsory delisting

Step 1: the Stock Exchange sends a notification of delisting shares and requesting the listing company to provide an explanatory letter and action plan published when the listing shares falls into category of delisting.

Step 2: In response to the listing entity, the Stock Exchange review and makes a decision. The Stock Exchange may allow the listing shares falling into category of delisting to be continued trading within a maximum 30 day- period from the date of the issuance of delisting decision

b. Voluntary delisting

Step 1: the Stock Exchange reviews legality of the application file when received and request further explanation if any. If necessary, Stock Exchange may seek for opinion from the State Securities Committee, and Stock Exchange only consider the application file upon getting direction from the State Securities Committee.

Step 2: the Stock Exchange considers making a decision of delisting shares and disclose the delisting information on the Stock Exchange’s media.

Step 3: the Stock Exchange undertakes to delist shares on the transaction systems after the delisting date is due.

Delisting shares may only be re-registered after twelve (12) months from the effective date of delisting if they meet the listing conditions.