cross-ownership involves many subjects
The State Bank of Vietnam has just issued Report No. 145/BC-NHNN to the National Assembly and delegates on the implementation of the National Assembly's Resolution on questioning in the banking sector.
Governor Nguyen Thi Hong said that in recent years, the State Bank has continued to improve the legal basis and resolutely implemented solutions to prevent and handle share ownership exceeding the prescribed limit, cross-ownership, lending, and investment not in accordance with regulations along with the process of restructuring credit institutions.
The Law on Credit Institutions 2024 has added regulations to help strengthen the prevention of investment, cross-ownership and manipulation and dominance in credit institutions.
Up to now, cross-ownership between credit institutions and related parties of credit institutions contributing capital and purchasing shares at other credit institutions has decreased significantly. Overcoming the situation of commercial bank ownership of shares in another credit institution exceeding the prescribed rate by more than 5% of the voting shares of another credit institution.
Shareholders and related parties who own shares exceeding the prescribed limit should continue to direct the handling of the shares in state-owned corporations and enterprises to focus capital on core business activities and use capital more effectively.
cross-ownership can be related to many subjects under the management of ministries and branches. Currently, there is still a situation of holding shares exceeding the limit at commercial banks that are state-owned enterprises with a fairly large ownership ratio, and commercial banks have difficulty in requiring these shareholders to divest.
De purpose in covering up, asking to stand in the name of the owner's equity to circumvent the law
Regarding the work of detecting, preventing and handling cross-ownership and manipulation and dominance in credit institutions, the Governor of the State Bank admitted to encountering many difficulties.
Controlling cross-ownership is very difficult in cases where shareholders and related parties of shareholders deliberately conceal, ask other individuals and organizations to stand in the name of the holding company to circumvent the provisions of the law on cross-ownership, ownership exceeding the prescribed level or circumventing regulations.
This leads to the potential risk of the operations of credit institutions lacking publicity and transparency. This can only be detected and identified through the investigation and verification of the investigation agency according to the provisions of law.
Determining the relationships between businesses is still limited due to information to determine the ownership of businesses, especially those that are not public companies, it is very difficult.
To detect and prevent cross-ownership, the State Bank said that in the coming time, this agency will continue to monitor the safety of credit institution activities and through inspection of capital, share ownership of credit institution, lending, investment, capital contribution activities, etc.
The State Bank continues to conduct inspection work according to the approved inspection plan, or surprise inspection, focusing on inspecting the contents of share ownership ratio; buying, selling, transferring bank shares, granting credit to customers, large customer groups (borrowing, investing in corporate bonds, etc.).
