A Trung Nguyen coffee shop. Trung Nguyen operates a nationwide chain of coffee shops in Viet Nam and has granted franchises in other countries. — Photo cafebiz.vn

The lawyer from BASICO Law Firm made the judgement in front of local press after public reports said Chairman Dang Le Nguyen Vu had "lost control" of the instant coffee company to his wife, Le Hoang Diep Thao.

Last week, the Planning and Investment Department of the southern Binh Duong Province named Thao as the legal representative of the firm, after rescinding an earlier decision issued in April that named Vu as the representative.

Duc said that in practice, a legal representative does not mean a person who governs a company since the law does not stipulate functions and tasks for a legal representative.

Such functions and tasks are always attached to specific titles such as chairperson or director, in accordance with the Enterprise Law.

This law states that a legal representative is the company chairperson or general manager, who is authorised to represent the company and make important decisions on business operations, human resources, bank accounts and the company seal.

Rights and responsibilities of a legal representative are stipulated in the charter of the company, and a company may have more than one legal representative, according to the current law.

"Only the management board has real power because it has the right to appoint or dismiss the legal representative of a company," Duc said.

At present, the management board of Trung Nguyen Coffee reportedly has three members; Thao, Vu and a representative of the Trung Nguyen Group.

Their stakes in the coffee firm are 5 per cent, 10 per cent and 85 per cent, respectively.

Duc said that, to be exact, the Trung Nguyen Group representative with such a controlling stake should have the "decisive right for everything." The representative has the right to vote for 85 per cent of management board members and decide who are the chairman and general director of the coffee firm.

Thus, the change in the legal representative of Trung Nguyen Coffee only has a sense of procedure. It does not mean any group of people are losing power and the rights of management, according to Duc.

However, Duc said what had been announced remained limited and more information would be required to know exactly what is going on at the company.

Last week's decisions of the Binh Duong department were based on a request issued in May by the People's Supreme Court in HCM City, which is in the process of ruling on the divorce between Vu and Thao. — VNS