This morning on April 26, Vietnam Joint Stock Export Import Bank (Eximbank) organised the shareholders’ meeting as planned. However, the meeting could not take place because only more than 57 percent of shareholders attended and had the right to vote, not enough quorum as prescribed. Thus, Eximbank must convene another meeting.
Previously, as we have informed, from February 2019 up to now, high-level personnel in Eximbank and large groups of shareholders of this bank have no consensus, leading to Eximbank becoming the focal point attracting the attention of the whole market.
More than a month ago, the bank’s Chair was changed but it later failed because the court required a temporary stop on the change of Chair after the former Chair Le Minh Quoc filed a lawsuit. Quoc said that the changing the Chair of the Board and the establishment of the Independent Committee by the Board was wrong.
Later, it was learned that the members of the bank’s Board of directors had several times asked Le Minh Quoc to convene a meeting on internal affairs of the Board of directors, but Quoc did not follow regulations.
Recently, the bank’s largest shareholder group, SMBC of Japan, has sent a petition to Quoc with the content ‘Independent Committee of the Board has identified a number of outstanding issues and made corrective recommendations in order to increase the efficiency of governance at Eximbank. The issues have been identified and proposed to overcome should be informed to all shareholders to collect their opinions.’ SMBC also asked the Board to include it in the shareholders’ meeting agenda for all the shareholders to vote for confidence with members of the Board of directors. However, Quoc rejected these requests.
Reportedly, after Le Minh Quoc had a reply to the refusal, the Supervisory Board of Eximbank reported to the State Bank of Vietnam (SBV)’s supervisory agency. The document clearly stated that the fact that Quoc arbitrarily answered the nine members of the Board of directors and the whole Supervisory Board about not including the content that SMBC proposed in the agenda of the meeting but did not consult Board members were wrong according to regulations.
Specifically, according to the provisions of the Enterprise Law and the bank’s charter, the right to convene a general meeting of shareholders is of the entire Board, not the Chair himself. So is the authority to review the contents of the meeting agenda. Whether to include content requested by a large group of shareholders on the agenda should be presented at the meeting and consulted all shareholders. It is not the decision of only the Chair of the Board.
In another issue related to the 2019 plan, the report sent to shareholders before the meeting of Eximbank said that the bank aims to increase total assets by 18.6 percent to over 181 trillion dong; capital mobilisation by 21 percent and credit balance by 11 percent; and reduce internal nonperforming loan (NPL) ratio to below 2 percent.
The bank has set two profit targets, of which profit before making additional provision for VAMC bonds is 2 trillion dong and pre-tax profit is 1.077 trillion dong. Previously in 2018, the bank had to adjust nearly half of the profit in the unaudited 2018 financial report, from 1.737 trillion dong to 827 billion dong due to the provision for additional risks.
Since 2013, Eximbank’s operations have been stagnant. Used to be among the top private equity commercial banks, Eximbank has so far regressed. Observers said that the disagreements between large groups of shareholders and internal Board of directors are one of the important reasons causing stagnation, so the urgent problem now is that the bank must maintain stability and harmonise groups of shareholders to bring Eximbank back to its development trajectory. Thus, it would ensure benefits for more than 6,000 employees, thousands of small shareholders and investors, as well as create a healthier and more attractive investment environment in the eyes of foreign investors in Vietnamese banking sector.
