Guidance For Investor Participating Share Auctions

(2-tier auction procedure)

1. Eligibility criteria

Vietnam and foreign economic institutions and individuals in accordance with Article 4 of Decree No. 187/2007/ND-CP issued on November 16, 2004 by the Government concerning the transformation of state owned enterprises to joint-stock companies (called as investors hereafter) with the following fulfilled requirements are eligible to participate in share auctions:
- Have legal status (for economic organizations); clear and defined address; Company representatives are requested to present a proxy; individuals are asked for identification card, legal personal documents and are able to act as a civilian.

- For foreign investors: besides the requirements for domestic institutions and individuals, foreign investors are required to open a bank account at the bank of Vietnam, they should comply with law of Vietnam. All activities related to the share selling and buying should be performed through this account.

- Financial intermediaries who execute pricing or auction shares of privatizing company cannot participate in the auction of this company.

Financial intermediaries with proxy service: In case financial intermediaries provide proxy service for foreign and domestic investors, this institution has a responsibility to clarify the number of investors, number of shares registered by a foreign and domestic investor.

  2. Information on auctions

Hanoi Securities Trading Center disclosure information on shares auction at least 20 days before auction day on 03 consecutive numbers of Vietnam Economic Newspapers and municipal newspaper where the company’s headquarter is located.

Detailed information on the company, Auction Regulation and other related information are provided at the offering company’s headquarter, auction affiliates’ registration place and websites: www.hastc.org.vn, www.ssc.gov.vn

  3. Auction participation procedure

3.1 Auction registration

Investors get or print the registration form for auction participation at auction affiliates’ registration place or on the website: www.hastc.org.vn.

(1) Deposit:

Investors deposit 10% of registered share value in starting price. The deposit should be in Vietnam Dong to Auction Affiliate’s account. Deposit is not subject to interest payment.

(2) Submit registration form for auction participation:

Investors fill in the form and submit at the registration places with following documents:

-          For domestic individuals: (1) ID card or passport. In case of proxy, the proxy paper is needed in compliance with Vietnam Law. (2) Deposit proof document;

-          For domestic institutions: besides regulations for domestic individuals, domestic institutions are required to submit business registration certificate or other equivalent documents, proxy paper to individual representing an institution perform all procedures (except for an individual who is the official representative of the company according to the law);

-          For foreign institutions and individuals: Besides requirements for domestic institutions and individuals, foreign investors are required to submit a Vietnamese bank account opening Certificate.

  3.2 Auction slip creation and submission

After completing registration steps, investors receive an auction slip.

Investors should carefully analyze the content of the slip, fill accurately and clearly all requested information, check before submitting the slip. The auction slip is considered a legal one if:

(1)     it was issued by an affiliate; has a stamp of the affiliate and clear, full information;

(2)     It cannot be corrected, erased or torn; the buying price cannot be lower than the starting price;

(3)     Total buying volume of shares in the auction slip should be equal to the registered volume;

(4)     No violation on buying price and volume unit specified in the Regulation of each auction;

(5)     Submit an auction slip on time;

(6)     The auction slip should be submitted in a signed envelop by an investor.

In case the auction slip is corrected, erased or torn, the investor should ask the affiliate to issue a new auction slip in replacement of the old one.

In case of the auction slip loss, an investor should fill in the new slip issuance form and the old slip has no value anymore.

  3.3 Result determination rules

- Determine according to the ranking of buying price from high to low price, investors who placed a buying price should buy with this price.

- Shares will be distributed to the buyer with the highest price first, then the remaining shares will be distributed to the second-highest price buyer, and so on, until all shares are sold out.

- In case investors have the same price, but their registered volume for this specific price exceeds the offering volume of shares remained, the number of shares for each investor will be determined in a following way:

If the shares remained constitute of less than 10, this volume will be distributed to the investor that has highest volume at that specific price.

Except for foreign investors, auction result is determined in the same way, but in combination with a limit on maximum buying ratio for foreign investors.

  3.4 Settlement and deposit handling

Successfully investors in the share auction are obliged to pay in full the rest of shares value in max. 15 days from the auction result information disclosure day. If after these 15 days investors do not pay or pay only a part of required amount, they will lose their deposit to the amount of shares unpaid, accordingly. In this case, the number of successfully auctioned shares will determined by the Auction Board form the higher price to lower one that has been put in the investor’s slip.

Investors that could not buy shares will receive their deposit in 05 business days from the auction result information disclosure day.

Investors will not receive their deposit in case they violate terms specified in the Auction Regulation.

 HANOI SECURITIES TRADING CENTER