Problems Corporate law in Vietnam

1 problems

1.1 understanding corporate governance , role of management structures
1.2 state-owned enterprises
1.3 investor protection

problems
understanding corporate governance , role of management structures

corporate governance in vietnam seen more management framework rather system accountability , protecting minority shareholders. in particular, loe not mandate separation of ownership , management. separation of ownership , management promotes accountability allowing managers objectively appraised. on other hand, owners serve managers more pursue own interests, possibly @ expense of interests of minority shareholders.

state-owned enterprises

following introduction of loe, soes converted single-organisation-owned llcs. however, state retains many powers , directly involved in management decision-making. government officials selected run companies political reasons. lack of business expertise , profit motive has led inefficiency , mismanagement of large state-owned enterprises. furthermore, since 3 supervisors can appointed, there limited monitoring on company managers. in 2010, state-owned shipbuilding firm vinashin ended in bankruptcy, following mismanagement , false reporting of financial statements. reflects inadequate monitoring , auditing mechanisms soes.

investor protection

the loe increasingly recognizing interests of minority shareholders introducing new avenues them hold management accountable. nonetheless, stringent prerequisites including higher shareholding requirements , need show evidence before minority shareholders can call shareholders meeting, investor protection in vietnam still limited compared other jurisdictions. other shortcomings of loe include limited opportunities shareholders request meeting, no imposition of legal responsibilities on board members approve unfair transactions, no shareholders rights sue in corporate governance structure (for scs), , shortage of provisions require disclosure obligations , directors avoid insolvent trading.

phuoc & partners vietnamese law firm, vietnamese attorney, vietnamese solicitor, vietnam company law

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