Recent cases related to the arrest and detention of the chairman of the Board of Directors of listed companies are the focus of attention from the public and investors. From this issue, many legal issues arise. And one of the notable legal issues is how the legal issues of corporate governance will be resolved.

Pursuant to Clause 4, Article 156 of the Enterprise Law 2020 “In case the Chairman of the Board of Directors is absent or unable to perform his/her duties, he/she must authorize in writing another member to perform his/her rights and obligations. of the Chairman of the Board of Directors according to the principles specified in the company’s charter. In case no authorized person or the Chairman of the Board of Directors dies, is missing, is detained, is serving a prison sentence, is serving administrative handling measures at a compulsory detoxification establishment, compulsory education, fleeing from place of residence, restricted or incapacitated civil acts, having difficulties in cognition or behavior control, being banned by the Court from holding certain posts, practicing professions or working as public employees. For certain tasks, the remaining members elect one of the members to hold the position of Chairman of the Board of Directors on the principle that the majority of the remaining members agree until a new decision of the Board of Directors is issued.”

Thus, it can be seen that the Enterprise in this case is required to “elect one of the members to hold the position of Chairman of the Board of Directors”.

In terms of status as a member of the Board of Directors, Article 160 of the Enterprise Law 2020 stipulates “1. The General Meeting of Shareholders dismisses a member of the Board of Directors in the following cases: a) Failing to meet the criteria and conditions prescribed in Article 155 of this Law; b) There is a resignation letter and is accepted; c) Other cases specified in the company’s charter.”

Article 155 of the Enterprise Law 2020 clearly stipulates: “Article 155. Organizational structure, criteria and conditions for being a member of the Board of Directors: 1. A member of the Board of Directors must have the following criteria and conditions. : a) Not falling into the categories specified in Clause 2, Article 17 of this Law; b) There is a resignation letter and is accepted; c) Other cases specified in the company’s charter….”

Accordingly, Clause 2, Article 17 stipulates: “2. The following organizations and individuals do not have the right to establish and manage enterprises in Vietnam:…e) Persons being examined for penal liability, detained, are serving prison sentences, or are serving measures administrative handling at compulsory detoxification establishments, compulsory education establishments or being banned by the Court from holding certain posts, practicing certain professions or doing certain jobs; other cases as prescribed by the Law on Bankruptcy, the Law on Anti-corruption….”

From the above provisions of the Enterprise Law 2020, enterprises, in addition to having to elect a replacement for the title of Chairman of the Board of Directors, must also dismiss the Chairman of the Board of Directors from his position as a member of the Board of Directors. The administrator is in custody.

In addition, for joint stock companies that are already public companies, listed on the stock market. Internal governance issues related to enterprises, in addition to complying with the provisions of the Enterprise Law 2020, the guiding documents of the Enterprise Law, must also comply with the provisions of the Securities Law 2019, documents this guide to the Securities Law.

Accordingly, extraordinary information disclosure is the first obligation that FLC Group Joint Stock Company must comply with when one of the events specified in Article 11 of Circular 96/2020/TT-BTC arises. In the case of a group joint stock company, there are two cases at Points n and l, Article 11 of this Circular

“n) Upon receiving the decision to prosecute against the company, the company’s insiders; temporarily detained, examined for penal liability against insiders of the company;…”

“l) The company changes, appoints, re-appoints, and dismisses internal persons; receive a resignation letter from an insider (the company needs to specify the effective date as prescribed in the Law on Enterprises and the company’s charter). At the same time, the company sends to the State Securities Commission and the Stock Exchange the information supply of new insiders according to the form specified in Appendix III issued with this Circular.”

Regarding the concept of “Insiders”, Article 45 of the Securities Law 2019 clearly stipulates: “Insiders are those who hold an important position in the management and administration apparatus of an enterprise, a public fund, or a company. public securities investment, including:

a) An internal person of an enterprise is the Chairman of the Board of Directors or the President of the Members’ Council or the President of the company, a member of the Board of Directors or a member of the Members’ Council, the legal representative, the General Director (Director), Deputy General Director (Deputy Director), Chief Financial Officer, Chief Accountant and equivalent managerial titles elected by the General Meeting of Shareholders or the Board of Directors or the Members’ Council or appointed by the President of the company; Head of the Supervisory Board and members of the Supervisory Board (Controllers), members of the Internal Audit Committee; company secretary, person in charge of corporate governance, person authorized to disclose information;”.

Thus, if the person holding the position of Chairman of the Board of Directors is an insider of the company, then this Group Joint Stock Company is obliged to disclose information about the temporary suspension of the Chairman of the Board of Directors. detention as well as the change of the position of Chairman of Management at this company within 24 hours from the date of the event.

The above are the legal obligations to be performed in the legal activities of corporate governance, limited in this article the writer does not mention the process, as well as how to perform the specific obligations mentioned above.

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