By the end of December 2009, the Vietnam Securities Depository (VSD) had received the securities deposit applications and files of 500 out of 4,000 public companies.
This means that a large number of public companies did not make their securities deposit by December 31, 2009 as ordered by the State Securities Company (SSC). SSC has repeated the request three times and threatened to impose sanctions on violators
Many public companies have requested a delay in making their securities deposit, citing dozens of reasons. However, according to VSD, the main reason for delays is that businesses hesitate to expose information after they make securities deposit.
Unclear sanctions are why securities deposits have been out of control. On June 4, 2009 SSC ordered public companies to make securities deposit as per request of the Securities Law. To date, only 10 percent have done so.
Those companies that do not deposit their securities and do not follow regulations on information are out of control of the watchdog agency. Meanwhile, the tardiness of some companies means that shareholders will experience disadvantages in securities transfers.
Public companies seem to feel safe, despite ignoring these orders and warnings. Apparently, they do not fear sanctions and cannot see any advantage to the deposits.
VSD representative stated that securities depositing still depends on the willingness of businesses.
As of January 27, 2010, SSC once again threatened to impose serious punishments on public companies that do not strictly obey the laws.
Vu Thi Kim Lien, Deputy Chairwoman of SSC, observed that the stipulated sanctions are not strong enough to deter violators. Public companies only have to pay a fine of five million dong for violations. Lien noted that the enterprises will be forced to both pay fines and make securities deposit this year.
In the immediate future, SSC may not allow public companies that do not make securities deposits, to issue more shares. In the long term, this may become law (i.e., issued securities of violating companies will not be recognized).
“We are now checking the list of the companies that have made their securities deposit, so that we can discipline those which have not done so yet,” Lien stated.