THE GOVERNMENT

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Objectives of the transformation of State enterprises into joint-stock companies (hereinafter referred to as equitization for short)

1. To make an important contribution to raising the efficiency and competitiveness of enterprises; to create a type of enterprises with multiple owners, including the majority of laborers; to generate a vigorous motive force and a dynamic managerial mechanism for enterprises to use efficiently the State capital and assets as well as their own capital.

2. To mobilize the capital of the entire society, including individuals, economic and social organizations at home and abroad, for investment in renewing technologies and developing enterprises.

3. To promote the genuine mastery of laborers and shareholders, to enhance the supervision by investors over enterprises; to ensure the harmony between the interests of the State, enterprises, investors and laborers.

Article 2.- Objects of application

1. This Decree shall apply to enterprises and their dependent units as prescribed in Article 1 of the State Enterprise Law (excluding those enterprises where the State needs to hold 100% of their charter capital), regardless of the enterprises� production and business results. The list of classified State enterprises shall be decided by the Prime Minister in each period.

2. The equitization of dependent units of the enterprises specified in Clause 1 of this Article shall be carried out only when:

a/ These dependent units meet all the conditions for independent cost-accounting;

b/ No difficulty or adverse impact shall be caused to the production and/or business efficiency of the enterprises or their remaining components.

3. For enterprises with independent cost-accounting, which fall into the subjects specified in Clause 1 of this Article and have, as reflected on their accounting books, a State capital amount of under VND 5 billion, if they cannot be equitized, they shall be transferred, sold, commercially contracted, or leased according to law provisions.

Article 3.- Forms of equitization of State enterprises

1. Maintaining the existing State capital portion in the enterprise and issuing share certificates to attract more capital.

2. Selling part of the existing State capital amount in the enterprise.

3. Selling the whole of the existing State capital amount in the enterprise.

4. Effecting the second or third form above in combination with issuing share certificates to attract more capital.

Article 4.- Subjects and conditions for buying shares

1. The following subjects shall be entitled to buy shares of equitized State enterprises:

a/ Vietnamese economic organizations, social organizations and individuals residing in the country (hereinafter called domestic investors for short);

b/ Foreign economic organizations, social organizations and individuals, including overseas Vietnamese and foreigners residing in Vietnam (hereinafter called foreign investors for short);

2. Foreign investors that wish to buy shares of equitized State enterprises must open accounts at the payment service-providing organizations that are currently operating on the Vietnamese territory and observe the Vietnamese law. All operations of buying and selling shares, receiving and using dividends and other revenues from the investment in buying shares must be effected via these accounts.

Article 5.- The right to buy first-time shares at equitized enterprises

The subjects specified in Clause 1, Article 4 of this Decree shall all be entitled to buy the equitized State enterprises� first-time shares with unlimited quantities but must ensure the State�s current regulations on the minimum number of shareholders and on the State�s dominant shares at those enterprises where the State needs to hold dominant shares.

Foreign investors may buy shares of a total value not exceeding 30% of the charter capital of the enterprises operating in the business lines stipulated by the Prime Minister.

Article 6.- Share certificates and founding shareholders

1. Share certificates are certificates issued by the joint-stock companies to certify the right to own one or a number of shares by shareholders contributing capital to the companies. They may be registered or bearer certificates but must contain the full principal contents as prescribed in Article 59 of the Enterprise Law.

The Finance Ministry shall provide guidance on the uniform forms of share certificates so that the enterprises can print and manage them according to regulations.

2. Founding shareholders of equitized enterprises are shareholders that meet all the following conditions:

a/ Participating in adopting the first charter of the joint-stock company;

b/ Jointly holding at least 20% of the number of ordinary shares eligible for sale offer;

c/ Owning a minimum number of shares as prescribed in the company�s charter.

Each founding shareholder�s minimum number of shares and the number of founding shareholders shall be decided by the shareholders� general meetings and prescribed in the companies� charters.

Article 7.- Rights and obligations of equitized enterprises

1. The equitized enterprises shall have to arrange and employ to the maximum the number of laborers available at the time of equitization and settle the regimes for them according to current regulations.

The joint-stock companies shall have to take over all obligations towards the laborers transferred from the State enterprises; be entitled to recruit, arrange and employ laborers and coordinate with the concerned agencies in settling the regimes for the laborers according to law provisions.

2. The joint-stock companies may take initiative in using all equitized assets and capital for organizing production and/or business; take over all the State enterprises� interests, obligations and responsibilities before their equalization, and have other rights and obligations as prescribed by law.

3. Member enterprises of equitized State corporations where the State holds dominant shares (over 50% of their charter capital) shall remain members of the corporations.

Article 8.- The State�s protection of investors

The ownership and all rights and legitimate interests of domestic and foreign investors that buy shares of equitized enterprises shall be protected by the State according to law provisions.

Chapter II

FINANCIAL HANDLING AND VALUATION OF TO BE-EQUITIZED ENTERPRISES

Article 9.- Assets leased, borrowed and accepted as joint-venture and association capital, unneeded assets, assets invested from the reward and/or welfare funds

Before equitization, the enterprises must inventory, classify and take initiative in handling, their assets according to the following regulations:

1. For assets which they have leased, borrowed or accepted as joint-venture and/or association capital, and other assets not under their ownership: The enterprises must liquidate the contracts or reach agreements with the asset owners so that the joint-stock companies can take over the already signed contracts or sign new ones.

2. For assets which are no longer needed by the enterprises, unused and awaiting liquidation: The enterprises shall liquidate or sell them or report to competent agencies for transferring them to other units according to current regulations. For those assets which have not yet been handled by the time of equitization, they shall not be calculated into the enterprises� value and the joint-stock companies shall be authorized to continue preserving and handling them or to transfer them to functional State organizations for reception and settlement.

3. For assets belonging to welfare facilities: creches, kindergartens, infirmaries and other welfare assets invested from the reward and/or welfare funds, they shall be transferred to the laborers� collectives in the joint-stock companies for management and use through the trade union organizations.

Particularly for dwelling houses of officials, employees and workers, including those invested with the State budget capital, they shall be transferred to the local land and housing agencies for management or sale to the present occupiers according to current regulations.

4. For assets being used in production or business, which were invested from the reward funds and/or welfare funds of the enterprises, they shall be calculated into the value of the equitized enterprises and converted into shares to be owned by laborers working in these enterprises at the time of equitization according to the actual working duration of each laborer.

Article 10.- Receivable debts

The enterprises shall have to compare, certify, recover and handle receivable debts before they are equitized under the current mechanisms. Where there remain bad debts at the time of equitization, they shall be handled as follows:

1. For debts which are adequately evidenced to be irrecoverable and neither personal nor collective responsibility can be identified, they shall be offset by the reserve sources; if the reserve sources are not enough, the deficit shall be deducted into the business results and profits at the time of equitization. Where the above-said sources are still not enough, the deficit shall be deducted into the State capital portions at the enterprises before they are equitized.

2. For those debts which are irrecoverable due to subjective causes and the responsibility therefor has been imputed to some individuals and/or organizations, such individuals and/or organizations shall be handled and must pay compensation therefor. If there remains any loss as the debts cannot be fully recovered, it shall be handled under the provisions in Clause 1 of this Article.

3. For receivable debts which have been overdue for 3 or more years, the debtors still exist but are unable to repay them, and the enterprises cannot recover them though they have taken many measures, they shall be handled under the provisions in Clause 1 of this Article.

4. For other overdue receivable debts, the enterprises may sell them to organizations with the debt-buying and -selling function. The loss resulting from the debt sale shall be handled under the provisions in Clause 1 of this Article.

Article 11.- Payable debts

1. The enterprises must mobilize every source of capital to pay due debts before they are equitized or negotiate with the creditors on how to handle them or convert them into equity capital.

The conversion of debts into equity capital shall be determined through the results of the auctions of shares, or be agreed upon by the enterprises and creditors but they must not be lower than the prices of shares sold to other subjects outside the enterprises.

2. Where the enterprises meet with difficulties in repaying overdue debts, such debts shall be handled as follows:

a/ For tax and budget debts: The enterprises shall have them frozen, rescheduled or written off or receive investment capital supports under the Government�s stipulations;

b/ For outstanding debts owed to commercial banks: The enterprises shall reach agreement with the lending banks in order to have such debts rescheduled, frozen, written off or their interest rates lowered, or to convert the loans into equity capital.

The commercial banks shall have to handle outstanding debts according to current regulations;

c/ For guaranteed foreign debts, the guarantors and the enterprises must reach agreement with the creditors so as to freeze, reschedule or reduce them, and arrange sources of capital for repaying them. If they fail to reach agreement thereon, the guarantors must pay the debts to the creditors. The enterprises shall then have the responsibility to make repayment to the guarantors or reach agreement with them on converting such debts into capital contributed to the joint-stock companies;

d/ For foreign debts which the enterprises have borrowed by themselves without guarantee, the enterprises shall have to arrange sources to repay them or reach agreement with the creditors on handling them or converting them into capital contributed to the joint-stock companies according to law provisions.

Article 12.- Reserves and undistributed profits

The reserves for inventory price decrease, bad debts, securities price decrease, exchange rate difference, job-loss allowances, financial reserves � and undistributed profits must be handled under current regulations before the valuation of to be-equitized enterprises. Where the enterprises have previous years� accumulated losses, they shall be allowed to use the pre-tax incomes earned up to the time of equitization to offset them before taking the measures prescribed at Points a and b, Clause 2, Article 11 of this Decree.

Article 13.- Assets contributed as capital to joint ventures with foreign countries

1. Where the equitized enterprises take over joint-venture activities, all of their assets contributed as joint-venture capital shall be determined on the principles laid down in Article 18 of this Decree so as to valuate the equitized enterprises.

2. Where the equitized enterprises do not take over joint-venture activities, they shall report such to competent agencies so as to handle the assets contributed as joint-venture capital as follows:

a/ Reaching agreement on buying or selling the contributed joint venture capital;

b/ Transferring them to other enterprises to act as new partners.

Article 14.- Cash balances of the reward and welfare funds

The cash balances of the reward and/or welfare funds shall be distributed to the laborers currently working at the enterprises to buy shares. Laborers shall not have to pay income tax on these incomes.

Article 15.- Value of equitized enterprises

1. The actual value of an enterprise shall be the value of all the existing assets of the enterprise at the time of equitization, taking into account its profitability acceptable by both share buyers and sellers. The actual value of the State capital portion at an enterprise is its actual value minus the payable debts and the reward and/or welfare fund balances.

2. The actual value of an equitized enterprise shall not include:

a/ The value of the assets specified in Clause 1, Article 9 of this Article;

b/ The value of assets no longer needed or assets awaiting liquidation;

c/ Bad debts already deducted into the enterprise�s value;

d/ Expenses for uncompleted capital construction of projects which were suspended prior to the time of valuation of the enterprise;

e/ Long-term investments in other enterprises, which competent agencies have decided to transfer to other partners;

f/ Assets belonging to welfare works invested from the enterprise�s reward and/or welfare funds, and dwelling houses of its officials, employees and workers.

Article 16.- Bases for determining the actual value of enterprises

1. Data on the enterprise�s accounting books at the time of equitization.

2. The quantity and quality of assets based on the inventory and classification of actual assets of the enterprise at the time of equitization.

3. Technical properties of assets, their use demands and market prices at the time of equitization.

4. The enterprise�s land use right value, business advantages regarding its geographical location and prestige, monopolistic nature of its products, designs and trademarks (if any).

5. The enterprise�s profitability determined on the basis of the ratio between profits and the owner�s capital of the enterprise.

Article 17.- Determination of the quality of assets, the land use right value and the value of business advantages of enterprises

1. The quality of an enterprise�s assets shall be determined on the basis of the capability to ensure safety in their operation and use, the product quality and the environment.

2. The land use right value:

a/ For the immediate future, the land lease and assignment policies shall still apply according to current regulations.

The People�s Committees of the provinces and centrally-run cities shall have to re-calculate the land rents at convenient locations for uniform application to all types of enterprises.

b/ For land areas assigned by the State to the enterprises for dealing in housing and infrastructures, the land use right value must be included into the value of the equitized enterprises. This land use right value shall be determined according to the land use right-transfer levy bracket set by competent agencies and must not be lower than the costs already spent on compensation, ground clearance and leveling�

3. The value of an enterprise�s business advantages shall be determined on the basis of the average ratio between the after-enterprise income tax profits and the State capital at the enterprise, averaged in three years preceding the equitization as compared with the interest rate of the Government�s bonds with a ten-year term at the nearest time, and multiplied by the value of the State capital portion at the enterprise at the time of valuation.

If the value of the enterprise�s trademark is accepted by the market, it shall be determined according to the market value.

Article 18.- Determination of the value of assets contributed as joint-venture capital

1. The value of assets contributed as joint-venture capital which is calculated into the value of the equitized enterprise shall be determined on the basis of:

a/ The value of the owner�s capital reflected on the financial statements of the joint-venture company at the time closest to the time of valuation of the equitized enterprise, which has been audited by an independent auditing organization;

b/ The equitized enterprise�s percentage of capital contributed to the joint venture;

c/ The rate of exchange between the foreign currency contributed as joint-venture capital and Vietnam dong, based on the average transaction rate on the inter-bank market announced by the State Bank of Vietnam at the valuation time for application to joint-venture companies applying accounting in foreign currencies.

2. The value of assets contributed as joint-venture capital, which is determined on the aforesaid bases, shall serve as the basis for valuating the equitized enterprises; the value of the joint-venture capital contribution on the investment licenses shall not be adjusted.

Article 19.- Methods of valuation of enterprises

Depending on the characteristics of the business and/or production lines as well as the practical conditions of each enterprise, different methods shall be allowed to be applied to valuate the equitized enterprises under the guidance of the Finance Ministry.

Article 20.- Organizing the valuation of equitized enterprises

1. The agencies competent to decide on the enterprise equitization shall decide to set up councils for valuation of equitized enterprises or select auditing companies or economic organizations with the valuating function so that the equitized enterprises can sign contracts therewith for determining their value.

2. A council for valuation of an enterprise shall be composed of:

a/ A representative of the agency which has decided on the enterprise equitization, as its chairman;

b/ A representative of the finance agency;

c/ Leading officials of the to be-equitized enterprise and a representative of the State corporation (if the enterprise in question is a corporation member).

Basing itself on the actual situation of the enterprise as well as specific requirements, the council may invite more organizations or technical, economic and/or financial specialists inside and outside the enterprise necessary for evaluating the quality and determining the actual value of assets of each type in the enterprise.

3. The councils for valuation of enterprises shall have the responsibilities to:

a/ Evaluate the results of asset inventory, classification and assessment and determine the value of the to be-equitized enterprises according to current regulations within 15 days as from the date the decisions to set up the councils are issued. The councils� evaluation results shall be recorded in written minutes which are signed by all full-fledged members of the councils;

b/ Re-determine the results on the enterprise�s value if so requested by the agencies competent to decide on the enterprise equitization.

The councils for valuation of enterprises shall be accountable for the accuracy of the results of the enterprise valuation.

4. Auditing companies and economic organizations which have valuated the enterprises must ensure the current regulations and completed their jobs according to the schedule set in the signed contracts, must be accountable for the accuracy and validity of the valuation results. The costs paid for hiring the enterprise valuation shall be calculated into the equitization costs of the enterprises.

5. The enterprise valuation results must be sent to the agencies competent to decide on the enterprise equitization for decision and publicization.

Article 21.- Use of the enterprise valuation results

The results of valuation of enterprises under the provisions of this Decree shall serve as the basis for determining the structure of the sale of first-time shares, for realizing the preferential treatment policies for laborers in the enterprises, the raw-material producers and suppliers, and for determining the "floor" prices so as to hold the sale of shares to subjects outside the enterprises.

Article 22.- Adjustment of the value of equitized enterprises

The agencies competent to decide on the enterprise equitization shall consider and decide on the adjustment of the enterprises� value in the following cases where:

1. Enterprises meet with difficulties in selling shares under the provisions of Clause 5, Article 24 of this Decree.

2. The enterprise�s value is re-determined during the period from the time of valuation to the time the enterprise is officially transformed into a joint-stock company.

Chapter III

SALE OF SHARES AND MANAGEMENT AND USE OF THE PROCEEDS FROM THE SALE OF THE STATE CAPITAL PORTIONS AT EQUITIZED ENTERPRISES

Article 23.- Determination of the structure of the first-time shares

The structure of first-time shares of equitized enterprises shall be determined in the following order:

1. Retaining the number of the State�s shares in the enterprises where the State needs to hold shares.

2. Sparing shares for sale at preferential prices to the laborers in the enterprises under the provisions of Clauses 1 and 2, Article 27 of this Decree.

3. Sparing shares for sale at preferential prices to the raw-material producers and suppliers in the enterprises engaged in processing agricultural, forest and aquatic commodities under the provisions in Clause 1, Article 29 of this Decree.

4. Sparing at least 30% of the remaining shares (if any) for sale to the subjects outside the enterprises, with priority given to the investors that have potentials in technology, market, capital and/or managerial experiences.

Article 24.- Sale of first-time shares

1. Shares shall be publicly sold at the equitized enterprises or at intermediary financial institutions according to the first-time share structure already approved by competent agencies in the equitization plans, in which:

a/ The sale of shares and the implementation of the preferential policy on the prices of shares sold to the laborers in the enterprises, to the raw-material producers and suppliers shall be effected by the equitized enterprises;

b/ The sale of shares to the subjects outside the enterprises shall be effected through intermediary financial institutions selected by the agencies competent to decide on the enterprise equitization, and in the form of auction or issuance underwriting under the guidance of the Finance Ministry.

If the equitized enterprises have small numbers of shares sold externally, conditions for sale of shares through intermediary financial institutions are difficult or the costs of sale of shares are in excess of the permitted commission levels, the equitization-deciding agencies shall assign the enterprises to sell their shares to outsiders in the auctioning form.

2. The financial institutions which are selected to sell outside the equitized enterprises� first-time shares shall, within 30 days before effecting the sale, must publicly announce at the enterprises and on the mass media the time, place and form of sale, participation conditions, the estimated number of shares on sale, and other matters related to the sale.

3. The sale of shares to domestic and foreign investors shall be effected uniformly in the Vietnamese currency. Where shares are bought in foreign currencies, they must be converted into the Vietnam dong according to the Vietnamese State�s regulations on foreign exchange management.

The sale of shares at preferential prices to the producers and suppliers of raw materials for the enterprises engaged in processing agricultural, forest and aquatic products shall comply with the Prime Minister�s regulations.

Where the participants to the share auctions offer equal prices, those investors that have potentials in technologies, markets, capital and/or managerial experiences and the subjects that agree to convert debts into shares shall be given priority to buy shares. Foreign investors that do not have conditions to directly participate in the auctions may negotiate with the sellers on the buying prices of shares which, however, must not be lower than those applicable to the domestic investors, and must ensure the conditions prescribed in Clause 2, Article 4 and Article 5 of this Decree.

4. For the equitized enterprises with their financial situations meeting the conditions for listing on the securities market, their plans on the outside sale of shares must ensure the conditions for being listed on the securities market after they are transformed into joint-stock companies.

5. If, past 60 days after the date the decisions approving the equitization plans are issued, the number of shares planned to be sold within the enterprises has not yet been sold out (including the shares sold at preferential prices to the laborers in the enterprises, the raw-material producers and suppliers), the agencies competent to decide on the equitization shall decide to sell the remaining shares widely outside the enterprises.

If, past 30 days after the above-said measure has been taken, the shares have still not yet been sold out, the equitization-deciding agencies shall adjust the enterprises� value as well as the plans on the sale of shares for transforming State enterprises into joint-stock companies.

Article 25.- Management and use of the proceeds from the sale of shares

1. The proceeds from the sale of the State capital portion at the equitized State enterprises, after the equitization costs have been deducted therefrom, shall be transferred into:

a/ The fund for support of the arrangement and equitization of central State enterprises, for cases of equitization of the entire enterprises or dependent units of independent enterprises which are directly attached to ministries, ministerial-level agencies and agencies attached to the Government.

b/ The fund for support of the arrangement and equitization of State enterprises of the provinces and centrally-run cities, for cases of equitization of the entire enterprises or of dependent units of independent enterprises which are directly attached to provinces or centrally-run cities;

c/ The fund for support of the arrangement and equitization of State enterprises of the State corporations, for cases of equitization of the corporations� dependent units or of entire member enterprises practicing independent cost-accounting.

2. The proceeds from the sale of the State capital portion at the equitized enterprises shall be used in the following priority order:

a/ Supporting the enterprises in paying allowances to the laborers who terminate or lose their jobs at the time of equitization;

b/ Supporting the enterprises in paying allowances to the laborers who terminate or lose their jobs after they have been transferred from State enterprises to work at joint-stock companies under the provisions in Clause 6, Article 27 of this Decree;

c/ Supporting the enterprises in re-training redundant laborers at the time of equitization so as to arrange new jobs for them in the joint-stock companies;

d/ Investing in the equitized enterprises so as to ensure the proportion of the State�s dominant capital in the enterprises where the State must hold dominant shares;

e/ Providing capital support to the to be-equitized State enterprises which meet with difficulties in paying overdue debts and social insurance debts;

f/ Supporting the enterprises in paying their debts when the State sells these enterprises but the proceeds therefrom are not enough to pay such debts;

g/ Providing support capital to the State enterprises for investment in renewing technologies, raising their competitiveness and developing themselves.

Chapter IV

POLICIES TOWARDS EQUITIZED ENTERPRISES AND LABORERS THEREIN

Article 26.- Policies towards equitized enterprises

1. They shall enjoy tax preferences under the Domestic Investment Promotion Law like newly-established enterprises, without having to carry out the procedures for being granted the investment preference certificates.

2. They shall be exempt from registration fee for the transfer of assets under their management and use to the joint-stock companies� ownership.

3. They shall be allowed to continue dealing in the already registered business lines and be exempt from the fee for being granted the business registration certificates when they are transformed into joint-stock companies.

4. They shall be allowed to maintain the contracts for renting houses and/or architectural objects of State agencies and other enterprises or be given priority to re-purchase them at the market prices at the time of equitization in order to stabilize their production and/or business activities.

5. They shall enjoy the land use rights under the provisions of the Land Law in cases where their value already includes the land use right value.

6. They shall be allowed to continue borrowing capital from commercial banks, financial companies and other credit institutions of the State under the mechanisms and at the interest rates applicable to State enterprises.

7. They shall be allowed to maintain and develop welfare funds in kind, such as cultural facilities, clubs, health stations, sanatoriums and creches, so as to ensure welfare for the laborers in the joint-stock companies. These assets shall come under the laborers� collective ownership and be managed by the joint-stock companies with the participation of the trade union organizations.

8. They shall be allowed to deduct from the proceeds from the sale of shares belonging to the State capital the actual, reasonable and necessary expenses for the process of transformation into joint-stock companies (including the expenses for hiring consultants and for valuation) at the levels set by the Finance Ministry. Where they are equitized in the form prescribed in Clause 1, Article 3 of this Decree, such expenses shall be deducted into the State capital amounts available at the enterprises.

Article 27.- Policies towards laborers in equitized enterprises

1. Laborers named on the regular lists of the equitized enterprises at the time the equitization is decided shall be sold by the State 10 shares at most for each year they have actually worked in the State sector with a 30% discount from the original face value of such shares. The value of each share is VND 100,000.

Where the equitization is effected in the form prescribed in Clause 1, Article 3 of this Decree, the preferential value granted to the laborers in the enterprises shall be deducted into the existing State capital portions at the enterprises.

The total preferential value, including the preferential value granted to the raw-material producers and suppliers, shall not exceed the value of the State capital portions at the enterprises, after subtracting the value of shares held by the State.

The laborers who own the shares bought at preferential prices shall be entitled to bequeath them and enjoy other rights of shareholders under the provisions of law and the joint-stock companies� organization and operation charters. Share certificates of this type of shares shall be the registered ones and can be transferred only 3 years after their purchase. In special cases where it is necessary to transfer such shares ahead of the aforesaid time limit, the consent of the companies� managing boards must be obtained. The joint-stock companies shall be given priority to re-purchase them at the market prices at the time of sale.

2. Poor laborers in the equitized enterprises shall be allowed to buy shares on credit at preferential prices, shall be granted a grace period of the first three years before making interest-free installment payments within seven subsequent years. The number of shares purchased on installment payments reserved for poor laborers must not exceed 20% of the total number of the State�s shares sold at preferential prices to laborers in the enterprises. The share certificates of this type of shares shall be registered ones. The owners of these shares can transfer them only three years after they have purchased them and paid up all debts to the State.

3. The laborers who have been transferred to work at the joint-stock companies shall be allowed to continue participating in social insurance and enjoying interests therefrom under current regulations.

4. The laborers eligible for retirement at the time of equitization shall have their interests settled according to current regulations.

5. The laborers who have lost or terminated there jobs at the time of equitization shall be paid job-loss or severance allowances according to law provisions.

6. After the State enterprises have been transformed into joint-stock companies, if due to the needs to reorganize business activities and/or renew technologies, which leads to the situation that the laborers who have been transferred from the State enterprises lose or terminate their jobs, including cases where they terminate their jobs voluntarily, they shall be settled as follows:

a/ Within 12 months as from the date the joint-stock companies are granted the business registration certificates, if the laborers who lose their jobs as a result of the restructuring fall into the subjects enjoying the policy towards laborers who are left redundant as a result of the re-arrangement of State enterprises under the Government�s Decree No. 41/2002/ND-CP of April 11, 2002, they shall be supported from the fund for support of redundant laborers.

The other laborers who also lose or terminate their jobs shall enjoy the job loss or severance allowances under the current provisions of the labor legislation and shall be supported by the fund for support of the arrangement and equitization of State enterprises.

b/ Where the laborers lose or terminate their jobs for four subsequent years, the joint-stock companies shall have to pay 50% of the total allowance amounts under the provisions of the Labor Code, the remainder shall be borne by the fund for support of the arrangement and equitization of State enterprises. Past the aforesaid time limit, the joint-stock companies shall have to pay fully the allowances to the laborers.

7. For the number of redundant laborers at the time of equitization who should be trained or retrained before they can be given new jobs in the joint-stock companies, the State shall support part of the funding for the joint-stock companies to organize training and retraining from the fund for support of the arrangement and equitization of State enterprises under the guidance of the Finance Ministry.

Chapter V

RIGHTS AND OBLIGATIONS OF SHAREHOLDERS BEING FOREIGN INVESTORS AND OF PRODUCERS AND SUPPLIERS OF RAW MATERIALS FOR ENTERPRISES ENGAGED IN PROCESSING AGRICULTURAL, FOREST AND AQUATIC PRODUCTS

Article 28.- Rights and obligations of shareholders being foreign investors

1. To be entitled to participate in managing the joint-stock companies according to the provisions of law and the joint-stock companies� organization and operation charters.

2. To be entitled to pledge their share certificates in credit relations in Vietnam.

3. To be entitled to change revenues being dividends, money amounts earned from the transfer of shares in Vietnam into foreign currencies for remittance abroad after having fulfilled tax obligations according to law provisions.

Where foreign investors use their earned dividends for reinvestment in Vietnam, they shall be entitled to preferences under the provisions of the Domestic Investment Promotion Law.

4. To be entitled to participate in transactions on the Vietnamese securities market and be obliged to observe the Vietnamese Government�s stipulations on the foreign parties� participation in the Vietnamese securities market after the joint-stock companies have effected their listings on the securities market.

5. To have other rights and obligations as prescribed by Vietnamese laws and the joint-stock companies� organization and operation charters.

Article 29.- Rights and obligations of the producers and suppliers of raw materials for enterprises engaged in processing agricultural, forest and aquatic products

1. To be entitled to buy shares, including those at preferential prices, in the enterprises they have supplied raw materials for, with a 30% discount from the original face value of such shares. The total value of preferential shares shall not exceed 10% of the value of the State capital portions at the enterprises. Share certificates of these shares shall be the registered ones and subject to the conditionally transfer as prescribed for the transfer of the shares bought at preferential prices by the laborers in the equitized enterprises.

2. To be entitled to pledge share certificates in credit relations in Vietnam.

3. To be responsible for supplying raw materials for enterprises under the signed contracts.

4. To have other rights and obligations as prescribed by law and the joint-stock companies� organization and operation charters.

Chapter VI

ORGANIZATION OF IMPLEMENTATION

Article 31.- Powers and responsibilities of the ministries, the provincial/municipal People�s Committees and the managing boards of State corporation

1. The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People�s Committees of the provinces and centrally-run cities, and the managing boards of corporations 91 shall have to formulate overall schemes on the arrangement of State enterprises under their respective management, submit them to the Prime Minister for approval and be responsible for organizing their implementation. Where they fail to materialize the already approved plans, the heads of the enterprises-managing agencies must be subject to various disciplining forms according to current regulations.

2. On the basis of the State enterprise-arrangement schemes already approved by the Prime Minister:

a/ The managing boards of State corporations shall direct the formulation of plans on the equitization of their corporations� member enterprises, then report them to the ministers in charge of the relevant economic and technical branches or the presidents of the provincial/municipal People�s Committees for decision.

b/ The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government and the presidents of the provincial/municipal People�s Committees shall decide on the equitization of enterprises under their respective management, organize the valuation of enterprises, decide on the value of enterprises, approve the equitization plans on transforming State enterprises into joint-stock companies under the guidance of the concerned agencies. Enterprises where the State needs to hold special shares, their equitization plans must be submitted to the Prime Minister for decision.

3. The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, and the presidents of the People�s Committees of the provinces and centrally-run cities shall decide on or adjust the values of enterprises. Where the actual value of the State capital portion at an enterprise is VND 500 million or more lower than the value recorded on accounting books, the written approval of the Finance Minister must be obtained before such decision is made.

4. The dossiers on the valuation of enterprises, the plans on the equitization of State enterprises and documents on equitization, made by the ministries, the ministerial-level agencies, the agencies attached to the Government, the provincial/municipal People�s Committees and State corporations, must be sent to the Steering Committee for the Renewal and Development of Enterprises, the Finance Ministry, for monitoring, summing up and reporting to the Prime Minister.

5. The Steering Committee for the Renewal and Development of Enterprises, the Finance Ministry, shall have to assist the Prime Minister in directing, inspecting, supervising and urging the ministries, the ministerial-level agencies, the agencies attached to the Government, the provincial/municipal People�s Committees and State corporations in implementing the equitization work according to law provisions and the already approved plans on the arrangement of State enterprises.

Article 31.- Business registration of joint-stock companies

After selling out shares and holding the shareholders� general meetings under the provisions of the Enterprise Law, the State enterprises must make business registration under the provisions of the Government�s Decree No. 02/2000/ND-CP of February 3, 2000 on business registration and operate under the Enterprise Law after they are granted the business registration certificates.

Article 32.- Management of State capital portions at joint-stock companies

1. The State capital portions at joint-stock companies shall be managed under the provisions of the Government�s Decree No. 73/2000/ND-CP of December 6, 2000 issuing the Regulation on the management of the State capital portions at other enterprises. Those who are working at State enterprises at the time of equitization and assigned to directly manage the State capital portions at the joint-stock companies shall be entitled to buy shares like other laborers in the enterprises.

2. For equitized enterprises where the State does not need to hold dominant shares or special shares, the agencies representing the owners of the State capital amounts at the joint-stock companies shall be entitled to decide on the further sale of shares under the State�s ownership in the joint-stock companies three years after the joint-stock companies operate under the Enterprise Law.

Article 33.- The ministries, the ministerial-level agencies, the agencies attached to the Government, and the People�s Committees of the provinces and centrally-run cities shall have to solve problems faced by the equitized enterprises according to their assigned competence within 15 days after receiving the full dossiers thereon. For any problems fall beyond their competence, they should promptly report them to the Prime Minister for consideration and decision.

Chapter VII

IMPLEMENTATION PROVISIONS

Article 34.- This Decree replaces the Government�s Decree No. 44/1998/ND-CP of June 29, 1998 and takes effect 15 days after its signing. All previous regulations on equitization which are contrary to this Decree shall be no longer effective.

Article 35.- The Ministry of Finance, the Ministry of Labor, War Invalids and Social Affairs, the State Bank of Vietnam, the State Securities Commission, the General Administration of Land, the other ministries and agencies shall have to guide the implementation of this Decree.

Article 36.- The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People�s Committees of the provinces and centrally-run cities, and the managing boards of 91 corporations shall have to implement this Decree.

On behalf of the Government
Prime Minister
PHAN VAN KHAI