Need to audit capital contribution in 5 years

This is the content of the Draft Law amending 7 Laws including the Securities Law discussed by the National Assembly at the Hall on the morning of November 7.

Public offering of securities: Capital contribution audit required within 5 years

This is the content of the Draft Law amending 7 Laws including the Securities Law discussed by the National Assembly at the Hall on the morning of November 7.

On the morning of November 7, the National Assembly discussed at the Hall the Draft Law amending and supplementing a number of articles of the Securities Law; the Accounting Law; the Independent Audit Law; the State Budget Law; the Law on Management and Use of Public Assets; the Tax Administration Law, and the Law on National Reserves.

Previously, at the group discussion session, there were some opinions agreeing with the need for the participation of an independent auditing organization to audit the capital contribution and capital increase process of the enterprise, because the stock market has a very high risk level, while the level and ability to analyze, evaluate and manage risks of investors, especially individual investors in the market, are still not high.

Regarding the time limit, there are opinions in favor of the draft regulation of 10 years, but there are also opinions in favor of shortening the reporting period to 5 years to make it more convenient for businesses to make reports.

In the report on receiving and explaining the group's discussion opinions on the opinion related to the deadline for capital audit reports, the Ministry of Finance plans to report to the Government and the Prime Minister for consideration and decision in the direction of shortening the reporting deadline from 10 years to 5 years.

According to the drafting agency, the addition of regulations on the time limit for reporting audited charter capital in the case of initial public offering registration or public company registration is necessary to aim at improving the quality of goods on the stock market, preventing fake capital and virtual capital from being brought to the stock market. This is also the content of the proposed report of the inspection, supervision and investigation authorities. At the same time, this also contributes to the development of a safe, transparent, effective and sustainable capital market.

Regarding the shortening of the reporting period to 5 years, the Ministry of Finance would like to accept and complete the draft as many opinions expressed by National Assembly deputies. Specifically, the Ministry of Finance plans to amend the Draft Law in the direction of: Reporting on contributed charter capital within 5 years from the date of registration for initial public offering of shares/registration of public company audited by an independent auditing organization. In case the enterprise was established for less than 5 years, it is calculated from the date of establishment.

According to the initial draft, the public offering dossier will require an additional capital audit report with a term of up to 10 years. Many experts have commented on the feasibility of this regulation. The reason is that many enterprises have gone through the process of separation, merger, change from state-owned enterprises to joint-stock companies, or sold a part to foreign countries, etc., so it will not be easy to collect documents on capital over a period of 10 years and independent valuation of contributed assets is also necessary in cases where shareholders do not contribute capital in cash. Therefore, the requirement for a long-term capital audit report, although on the one hand, protects investors closely, on the other hand, can also make it difficult for companies and family businesses that have not previously intended to list shares or have not prepared complete and clear records.

This is the content of the Draft Law amending 7 Laws including the Securities Law discussed by the National Assembly at the Hall on the morning of November 7.

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