The State Securities Commission of Vietnam (SSC) last Friday slapped penalties on three individuals and organizations for breaching regulations while buying en mass the shares of Sacombank under a power transferring plan, something they did as early as March, while the transfer was completed a fortnight ago.

Eximbank chairman Le Hung Dung (1st, left),and Sacombank chairman Dang Van Thanh (2nd, left), shake hands with one another at the meeting., Photo: Tuoi Tre

Saigon-Asia Financial Investment JSC, Saigon Exim Investment JSC, and Tran Phat Minh were amongst the alliance formed to acquire power at Sacombank, or the Saigon Thuong Tin Commercial Joint Stock Bank.

According to SSC, the three investors were fined for not submitting reports on their becoming Sacombank’s major shareholders after only one transaction.

Specifically, Exim Investment JSC on January 1 purchased 42 million Sacombank shares, bringing its total stake in the bank to 50 million shares, or 5.17 percent, which declared the company a major shareholder.

Similarly, in February Minh bought more than 1.544 million shares, and also become a major shareholder with a 5.01 percent stake.

Saigon-Asia Financial Investment JSC made the same move on March 1, and now holds a 5.01 percent stake after purchasing 22 million Sacombank shares.

Last February Eximbank, which holds a 9.73 percent stake in Sacombank, initiated the move by saying it was authorized to represent the group of major shareholders (holding more than a 51 percent stake) to call for an irregular shareholder meeting and reelect the board of directors of Sacombank.

The indicated three organizations and individual have bought a number of Sacombank shares to boost the acquisition, which was materialized with the introduction of a new board on May 27.

The year-long acquisition ended with almost all the power in Sacombank being transferred to the new shareholders group, including eight additional newly elected members from other banks, and former Sacombank chairman Dang Van Thanh and his son, Dang Hong Anh.

While many insiders have called for SCC to intervene in the acquisition of the 70,000-shareholder Sacombank, the watchdog had remained silent until last week, when it suddenly announced the mere fine of VND60 million for each of the violators, angering both the public and insiders.

Power neutralized?

“It seems like SSC’s management role has been abnormally neutralized,” the director of a securities firm told Tuoi Tre.

He said SSC must not have been uninfomred of the participation of Saigon Exim, a subsidiary of Eximbank, and a major shareholder of Sacombank, in the acquisition, but the watchdog simply kept silent.

Analysts said SSC should not have neglected opinions from insiders regarding such a large deal as a Sacombank power transfer. But SSC failed to announce any checkups on the transactions related to Sacombank shares, they claimed.

SSC also did nothing when the three investors bought shares en mass to become Sacombank’s major shareholders, which insiders said is an abnormal stance.

The neutralization of the authorities’ management role is worrying listed company as they may fall into the same situation, when other investors defy regulations to buy shares with impunity to acquire them.

Tardy penalty normal?

In an interview with Tuoi Tre Monday, SSC chairman Vu Bang said there is nothing dubious in the issue.

“It’s normal for the implementation of an administrative penalty to last for several months, as it’s stipulated that violators sign to the reports,” he said.

However, Bang admitted that he did ask Eximbank to report on its announcement to acquire Sacombank, but did not receive any response.

“I asked the SSC inspectorate to report the handling of the three investors related to the acquisition, but I believe there are no irregularities here,” he asserted.

Source: tuoi tre