Firms concerned about legality of online meeting amid pandemic

Wednesday, Apr 22, 2020 07:42

Technology firm FPT's chairman Truong Gia Binh delivers a speech at the firm's annual shareholder meeting on April 8. — Photo courtesy of FPT Corporation

Companies in Vietnam are treading on new ground as for the first time ever they must hold annual shareholder meeting online.

The COVID-19 pandemic means many businesses either can't, or are reluctant to, meet face-to-face.

So in a first for Viet Nam, businesses must now hold crucial meetings via online portals.

This has left some questioning the legality of the voting procedures while others are holding out to see if the pandemic eases before fast-approaching deadlines.

Technology firm FTP has already conducted proceedings using a web platform. Property developer Novaland and Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank) are among a number of firms hoping to follow suit.

But others are holding fire, hoping by the time the June 30 deadline comes around, the pandemic will have eased to allow face-to-face meetings in a safe environment.

If they miss the deadline, they will be penalised.

Century Synthetic Fiber Corporation (HoSE: STK) strategy director Nguyen Phuong Chi questioned the logistics of holding meeting online. As no precedent has been set before, she is concerned there may be issues in the future over the legality of voting procedures.

Auditing firm Deloitte’s chairperson Ha Thu Thanh, said it was necessary for the board of directors to gain approval from shareholders and corporate charters were adjusted accordingly.

Online meetings would force companies to upgrade technology and save expenses, she said.

Companies would have to make sure meetings held remotely did not suffer unforeseen technical issues and interaction between shareholders and the steering board is crystal clear to avoid confusion.

The number of attendees would increase and the results of voting would be unpredictable, Thanh said.

But according to Phan Duc Hieu, deputy director of the Central Institute for Economic Management (CIEM), these are issues that can be resolved.

He said the Law on Enterprise stated a shareholder could choose whether they would be present at the meeting or not but their rights and benefits would be still protected, he said.

A shareholder was considered “participating at the meeting” if he was able to submit his votes on electronic platforms such as fax machine, emails and e-voting, he said.

That meant a company did not have to change its corporate charter and ask for shareholders’ approval in order to organise an online or virtual annual meeting because every shareholder had the right to choose whether to attend the meeting personally, Hieu said. — VNS

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