Conflict among the major shareholders at Vietnam Export Import Commercial Joint Stock Bank (Eximbank) was making it difficult for these small shareholders when the Bank’s business activities were not stable.
According to PCH, a small shareholder, he had invested in Eximbank since 2007 and had not received any dividend for five years. The management of the Bank had fallen into crisis. Some members of the Board of directors had no enthusiasm for the overall development of the Bank, leading to the division, competition for interests among the major shareholder groups.
The rare situation occurred when the internal shareholders of the Bank could not find a common voice, especially the large shareholder groups that prevented Eximbank from holding the Annual general Meeting of Shareholders for two consecutive years, 2019 and 2020.
Small shareholders struggled among internal conflicts
In fact, internal conflicts at Eximbank had been taking place many years ago but had started to become fierce since 2019. The Supervisory Board at Eximbank also pointed out internal disputes in the Board of directors from 2019 that had had a significant influence on its operation. Specifically, the Supervisory Board said that in the last term (especially in 2019), the activities of the Board of directors lacked in rhythm. Members still had mixed opinions, and meetings often lasted long without making a final decision.
The above reasons led to the slow decision-making on important issues of the Bank, typically the appointment of the general director and the legal representative.
Besides, the issues about the Annual general Meeting of Shareholders, the extraordinary meeting at the request of shareholders, and the provision of documents at the request of the banking supervision and inspection agency, were also not handled promptly. This had led Eximbank to be administratively sanctioned, much affecting the Bank’s image.
Investing in Eximbank since 2007, according to PCH, there was a fierce conflict between the major shareholder groups leading to delayed meetings. In 2019, Eximbank twice organised the unsuccessful meeting due to the insufficient number of shareholders attending and not approving the meeting programme. In 2020, the annual general meeting scheduled to take place on June 30 was also unsuccessful for the same reason.
This showed a serious instability in Eximbank’s management and operation, the shareholder emphasized. According to individual shareholders, the crisis at Eximbank had been related to the Nam A Commercial Joint Stock Bank (Nam A Bank) group of shareholders.
Since Luong Thi Cam Tu, former general director of NamABank, joined the Board of directors of Eximbank in 2019, the conflict at the Bank had become fiercer. This event also started the process of a dispute on the position of the bank chair. In less than one year, Eximbank had changed the chair five times among members Le Minh Quoc, Luong Thi Cam Tu, Cao Xuan Ninh and Yasuhiro Saitoh. In particular, groups of shareholders had repeatedly proposed to convene the meeting to dismiss the Chair of the Bank.
In its latest announcement, Eximbank said it would hold its second annual congress on July 29. In the opposite direction, SMBC (shareholders holding 15 percent of capital) continued to request an extraordinary meeting before the annual general meeting and still contained the content of reducing the number of members of the Board of directors and dismissing the Chair of the Board of directors. Yasuhiro Saitoh.
Who would protect the small shareholders?
According to Lawyer Truong Thanh Duc, Chair of the Board of directors of BASICO Law Company, there were currently very few regulations and laws to protect small shareholders in cases similar to Eximbank. The current rules were in the spirit of safeguarding small shareholders, but in reality, they did not make much sense.
In the form of a joint-stock company, when voting at the meeting, it was required to qualify more than 50 percent of the shares present and accumulate votes from high to low. With important contents, such as amendment of the charter, the election of the Board of directors, there must be over 65 percent of the shares attending. However, the law allowed that if there were no direct meeting for opinion, in all cases, only voting shares would be too oversold. Shareholders who owned more than 50 percent of the charter capital could amend the charter by not approving the content of the meeting. However, opinions about the amendment of the charter, election of the Board of directors, or everything that mattered most could still be decided without the rate of 65 percent when voting outside the congress, Duc said.
In Eximbank’s case, the lawyer said, the State Bank of Vietnam (SBV) would not interfere in the Bank’s internal dispute. Monetary management agencies often severely punished wrongdoing and violations, including ethics and personnel in the banking industry, but shareholders’ fighting could not be intervened.
Cooperating without talking to each other would cause damage, he said, stressing that Eximbank, as well as SMBC’s strategic shareholder required to convene up to two shareholders meetings.
Regarding the fact that SBV had not approved Eximbank for the position of general director, the lawyer said that maybe the proposed person was not qualified because of internal conflicts, violations of regulations. The approval of senior banking staff was different from the corporate because of the responsible nature. If the Bank had a problem and collapses, SBV would be responsible, unlike corporates.
