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COVER STORY

emember the 2022 saga of Van “This is a game-changer for investors,”
Thinh Phat and Sai Gon Commer- one anonymous independent investment
R cial Joint Stock Bank (SCB)? By analyst emphasized. “For too long, opaque
year’s end, the associated indictment structures allowed hidden agendas to
revealed that the Chairwoman owned a influence corporate decisions. Now,
staggering 91.5 per cent of shares in the investors can finally see who’s pulling the
bank, which was then the largest private strings, making it easier to identify con-
bank in the country by asset value, against flicts and hold companies accountable.”
the maximum permitted level of just 5 Dr. Can Van Luc, who is currently
per cent. This ownership was hidden the Chief Economist at the Joint Stock
through a complex web of 27 domestic Commercial Bank for Investment and
and foreign legal entities and individuals. Development of Vietnam (BIDV) and
Many thousands of investors and depos- concurrently serves as the Director of
itors were left reeling, their trust in the the Training and Research Institute at
system shaken. The episode exemplified BIDV, elaborated more broadly. “Increased Credit institutions and foreign bank
the dangers of opaque ownership structures transparency clearly helps stakeholders branches must make their financial
lurking in the murky depths of Vietnam’s better understand and assess more accu- statements publicly available within 120
days of the fiscal year-end, as required
financial system. New disclosure regulations, rately and more fully the governance and by law. This obligation excludes
specifically Article 49 of the amended Law financial capacity of the credit institution institutions under special control.
on Credit Institutions, officially announced and its operations, thereby making more
in State President Vo Van Thuong’s Order accurate and appropriate decisions,” he Summary of Article 49:
on February 19 and effective from July 1 told VET. Provision and Public
this year, with just a few minor exceptions, However, with great transparency
aim to shine a light on these very shadows. comes the potential for information over- Disclosure of Information

With these extensive new disclosure load. Individual investors, especially those
requirements now codified into law, no with limited financial expertise, may feel Who must provide information:
Management Boards, Members’ Councils,
longer can complex ownership structures overwhelmed by the intricate webs of Control Board Members, General
remain veiled in secrecy. The imminent ownership revealed in the disclosures. Directors / Deputy Directors, and
impact will be profound across the system’s The sheer scale of data is staggering. equivalent titles: Must disclose their own
interdependent stakeholders, from empow- Over 1,600 publicly-traded companies and related parties’ ownership of 5 per
ered regulators to wary investors and and one million businesses nationwide, cent or more in any enterprise or
organization, as well as their positions in
depositors, to banks themselves now com- as of the end of 2023, are now subject to other organizations.
pelled to open their books. these requirements. Imagine the potential Shareholders owning 1 per cent or more
Navigating the new terrain will require layers of interconnected entities within! of charter capital: Must disclose their own
dexterity. Investors must filter an influx To address this, investors may want and related parties’ personal and
of new data, even while gaining tools to to collaborate with industry players to ownership information.

make informed decisions. Regulators take develop user-friendly tools and educa- Information to be provided:
on immense responsibility to balance tional resources. Global corporate data Full name, ID number, nationality (for
transparency with privacy. And banks companies like OpenCorporates, Owler, foreigners), address, and relationship
walk a tightrope to embrace openness or Fullcircl could offer valuable insights (for individuals).
while maintaining stability. into millions of target companies and Enterprise name, ID number, address,
and legal representative (for organizations).
financial institutions. Shareholding percentage (own and related
These services are helpful to not only parties).
FULL DISCLOSURE overcome challenges in data overload
but also open doors to deeper analysis Frequency of disclosure:
FOR INVESTORS and more informed investment strategies. Initial disclosure: Within seven days of
Their sophisticated algorithms can ana- becoming subject to the requirement.
Updates: Within seven days of any
For years, investors navigated a twilight lyze the disclosed data, uncovering hidden changes to the information.
world, where opaque ownership struc- patterns and relationships that may signal Shareholders with 1 per cent ownership:
Only need to update if their or their related
tures and obscured relationships shrouded undervalued opportunities or potential parties’ ownership changes by 1 per cent
informed decision-making. Now, akin to risks, leveling the playing field for indi- or more.
flipping on the lights, new disclosure vidual investors with tools traditionally Annual announcement: Information must
requirements illuminate previously reserved for institutional players. be presented at relevant meetings and also
unseen corners of the financial landscape, publicly announced.

empowering investors with critical infor- Public announcement:
mation to reshape market dynamics and SHORT-TERM PAIN, Credit institutions must publish information
make more informed choices. LONG-TERM GAIN on shareholders owning 1 per cent or more
Imagine investing in “Company Y,” on their website within seven days of
unaware that a major shareholder held receiving it.

significant stakes in its main competitor. The path to transparency isn’t without its Responsibility for accuracy:
Such scenarios, once commonplace, are macro-economic bumps. The initial wave Both providers and announcers are
on the decline. Detailed disclosures now of disclosures may trigger short-term mar- responsible for ensuring information is
mandate revealing not just major share- ket volatility as previously unknown own- truthful, accurate, complete, and timely.
holder identities but also their connec- ership stakes come to light. Investors might
tions to other stakeholders, shedding react cautiously, potentially leading to
light on potential conflicts of interest. stock price fluctuations and impacting

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