Bank shareholders defy regulations on ceiling ownership ratios The Law on Credit Institutions has been taking effects for three years already, but a lot of the provisions of the laws have not been implemented, including the one on the individuals’ ceiling ownership proportions.   Dr. Vu Dinh Anh, a well-known economist, pointed out that a lot of banks’ individual shareholders now hold more than 7-9 percent of shares of the banks, but they have not been punished by the watchdog agencies. The Law on Credit Institutions which took effect in 2010, stipulates that a individual shareholder must not hold more than 5 percent of a bank’s chartered capital. The total shares of the shareholders and other relevant people must not exceed 20 percent. Meanwhile, the Bac A Bank’s 2013 report showed that every of the four big shareholders of the banks still holds more than 5 percent of the bank’s chartered capital. Bac A Bank’s President Tran Thi Thoang, for example, holds 5.2 percent of the bank’s stakes. Thai Huong, Deputy Chair and CEO of Bac A, holds approximately 7 percent. Tram Be, one of the most influential Vietnamese businessmen, and his family members now hold more than 20 percent of the chartered capital of Southern Bank. Each of Be and his daughter Tram Thuyet Kieu holds 7-8 percent of the bank’s shares. Explaining this, an official of the Legal Department of the State Bank of Vietnam said the shareholders are not guilty, because they contributed the high proportions of capital to the banks before the Law on Credit Institutions took effect on January 1, 2011. However, the official admitted that the shareholders have to reduce their ownership proportions at the banks after the law took effects. The representative of Bac A Bank said Thai Huong is a big shareholder, who contributed a huge capital to the bank in 1994, when the bank was established. The bank’s representative affirmed that Bac A has been making necessary steps to reduce the stake ownership ratios held by Thai Huong and the President. “It is expected that the work would be completed by 2015, when the bank finishes the process of increasing chartered capital,” he said. Meanwhile, a senior executive of Southern Bank said the bank has reported the problem to the State Bank. “We have been trying to reduce the big shareholders’ stake ownership ratios step by step. However, we still have not found reasonable partners to transfer the stakes,” he said. Meanwhile, analysts commented that there is no reason for the big shareholders to hurry to transfer shares to reduce their ownership ratios. The article No. 161 of the law stipulates that the State Bank has to release a document guiding the procedures to implement the regulation on the stake ownership ratio. However, the legal document still has been drafted over the last three years. A source from the State Bank of Vietnam said the watchdog agency has realized the problem, but it still cannot release such a legal document, for some reasons. However, the source said the document would be issued soon, which stipulates that the shareholders holding more-than-allowed stake proportions will have to withdraw capital and will not be able to buy more shares. VNE