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Annual meeting quorum rule hassle for firms: investor association   2009-04-02 - VietNamNet/TN

The Vietnam Association of Financial Investors (VAFI) has sought Prime Minister Nguyen Tan Dung’s approval to reduce the minimum quorum required for a valid annual meeting.


The Enterprise Law stipulates that a company’s annual meeting is valid only if the participating shareholders represent at least 65 percent of voting rights.


But in a note sent to Dung and other relevant agencies last week, the association, known as VAFI, said for publicly traded firms the ratio should be reduced to 51 percent since these companies, with a large number of investors, find it difficult to comply with the regulation.


“Some publicly traded companies have thousands of investors living in many different areas and a significant ratio of foreign investors not even in Vietnam... Shareholders who live far [away] do not attend the meeting due to expense and time issues,” the note said.


Day traders, who hold remarkably large stakes in companies listed in Ho Chi Minh City and Hanoi, are not interested in attending meetings, it continued.


As a result, some publicly traded firms fail to attract enough shareholders. They have to cancel meetings, bear the costs, and plan again for the meeting, VAFI said.


The association also proposed that publicly traded companies that have to cancel the first meeting for lack of quorum should be allowed to hold one within 30 days even if it does not comply with the 51 percent minimum ratio regulated for the second meeting.

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