Law on credit institutions takes effect
Law on credit institutions takes effect
Many business people, who hold leadership positions at both banks and other firms, have decided to give up their positions in enterprises and keep the banking management positions to meet a new Government regulation.
According to the revised law on credit institutions approved by the National Assembly last year, leaders at banks are not allowed to hold management positions in enterprises. Accordingly, chair of board of directors (BoD), chair of the member board, and general director of credit institutions (CIs) cannot be the chair and member of BoD, or chair and member of the board of members, general director, deputy general director, or other equivalent titles in any other enterprises.
The new regulation has taken effect since January 15; however, under the transitional provision of the law, these leaders may continue to concurrently hold the two positions until the end of their term, or the expiry date of the appointment at the bank.
According to the National Assembly Economic Committee, the fact that an individual is holding leadership positions at both a bank and another business has triggered several problems and affected banking operations and safety of the entire banking system. Therefore, the new regulation aims to ensure publicity, transparency and risk prevention for both credit and production activities.
Many business people, therefore, have been forced to give up their current positions in enterprises, where they have gained their reputation and careers, to hold senior leadership at banks.
Duong Cong Minh, chair of Sacombank’s BoD, has officially resigned from his position in many other businesses to focus on the restructuring process at Sacombank. Specifically, he is no longer the chair of BoD of four companies, including Him Lam Joint Stock Company, Bao Long Sport Equipment Joint Stock Company, Xin Man Development Joint Stock Company and Lien Viet Securities Company. He was elected to lead Sacombank at the bank’s annual general meeting in July 2017.
According to Minh, his resignation from Him Lam and other companies, where he used to hold top positions, will not affect the business of these companies.
Another case is of Do Minh Phu, chair of Doji Group, who recently announced his resignation from this position to continue being the chair of BoD of TPBank.
Similarly, Do Quang Hien, chair of T&T group and Saigon Hanoi Commercial Joint Stock Bank (SHB) also chose the bank and stepped down from T&T Group.
Hien will also withdraw from the top position at several other companies, such as Saigon Hanoi Fund Management Company, Saigon Hanoi Insurance Company and Saigon Hanoi Securities Company.
Another well-known businesswoman Thai Huong has officially announced she will leave the chairmanship at TH Group, the owner of TH True Milk brand, after 10 years and choose to be the general director of BacABank.
Currently, many business leaders are chairing banks’ BoDs and at the same time running other companies. For example, Vo Quoc Thang is chair of BoD at Kien Long Joint Stock Commercial Bank and Dong Tam Company; Vu Van Tien is chair of BoD at An Binh Commercial Joint Stock Bank and Geleximco Group; Nguyen Thi Nga is chairwoman of BoD at Southeast Asia Commercial Joint Stock Bank and BRG Group; while Le Thi Bang Tam is chairwoman of BoD at HCM City Development Joint Stock Bank and Vietnam Dairy Products Joint Stock Bank (Vinamilk). Some of the leaders said they will meet the above requirement by the end of their term.
