Many foreigners investing in Vietnamese securities are being deprived of shareholder rights.

Language and legal barriers and being left on the sidelines at annual shareholder meetings were common complaints voiced at a forum on strengthening listed companies’ corporate governance rules, held in Hanoi last week.

A foreign five-year stock market veteran said many companies he had invested in had not provided him with information or documents on upcoming annual shareholder meetings as required by law. As a result, he could not join or authorise anyone to join the meetings as a proxy voter.

However, listed firms said many individual foreign investors’ addresses were unclear with invitation letters and documents often bouncing back. The Vietnam Custody Centre proposed changes to listed firm sample charter regulations. The centre said that listed firms and share issuers must place information, including English-language documents, about shareholder meetings on their websites. Moreover, it claimed that firms must send information to the centre so it could inform investors.

The centre also suggested introducing rules similar to Singapore’s, regulating all foreign investors opening a Vietnamese securities trading account to register an address in Vietnam so listed firms and market regulators could send necessary information their way.

Dr. Nguyen The Tho, head of the State Securities Committee’s Issuance Management Department, pledged he would focus on legal changes, including those relating to the sample charter, to address this obstacle. Tho said online annual shareholder meetings might help remove geographical problems for foreign investors.

Overseas-based foreign investors’ difficulties in delegating someone to join shareholder meetings were also a hot topic at the forum. To authorise someone, an authorisation letter must be sent to Vietnam via a Vietnamese diplomatic agency in the country the investor is residing in, before being translated into Vietnamese, notarised then sent to the company’s executives.

Tho said improved corporate governance was the key to dealing with these complaints. He said the market regulator was completing a regulatory framework on corporate governance, including clarification of authorisation issues. “Changes to the sample charter applied to listed firms, attached to Decision 15/2007-QD-BTC, would be introduced next year to assist stock market transparency.”