Enhancing Transparency and Risk Control
Continuing the meeting agenda, on the morning of June 9th, the National Assembly Standing Committee discussed and gave opinions on the proposal to amend and supplement the Law on Enterprises.
Regarding the regulations on private bond issuance by non-public companies, Minister of Finance Nguyen Van Thang stated that some delegates suggested considering the removal of specific conditions for enterprises when issuing private bonds.
Minister of Finance Nguyen Van Thang. Photo: National Assembly |
According to Mr. Thang, the Government has clarified the necessity of this regulation in the draft law. The reason for this supplement is to increase the financial capacity of the issuing enterprise, limit bond payment risks for both the issuer and investors, and ensure a stable economy.
“The proposed bond value of not exceeding five times the owner’s equity basically does not affect capital mobilization for production and business activities,” said Mr. Thang.
After careful examination, Mr. Phan Van Mai, Chairman of the Committee for Economic and Financial Affairs, emphasized that this content had received much attention and feedback from the National Assembly delegates. He suggested that the conditions for issuing enterprise bonds should be carefully studied to improve bond quality, enhance transparency, control risks, and meet the capital needs of enterprises.
“Most of the issues regarding private bond payments that have arisen in the past are related to real estate businesses, which are excluded from the draft law,” Mr. Mai added.
Furthermore, the reviewing agency also noted that setting a specific ratio of five times might hinder flexibility in governance. Therefore, the Standing Committee of the Economic and Financial Affairs proposed two options.
Option 1: It is recommended to set conditions regarding the debt ratio and the value of bond issuance relative to owner’s equity for private bond issuance by enterprises. These conditions should be in accordance with the Government’s regulations, considering economic management and development requirements for each period, specific industries and fields, and the enterprise’s compliance with the law.
Option 2: Agree with the draft law’s provision of a ratio of debt to owner’s equity of five times. It is suggested to continue reviewing and editing to ensure specific application to the conditions for private bond issuance by excluded subjects.
Clarifying the Ratio of Not Exceeding Five Times
Speaking after Mr. Mai, Ms. Tran Thanh Man, Chairwoman of the National Assembly, agreed with the Government’s report. She stated that private bonds are a risky financial product, and buyers must assess the risks and take responsibility for their choices.
 Chairwoman of the National Assembly, Tran Thanh Man. Photo: National Assembly |
Recently, there have been cases of violations regarding private enterprise bonds, with companies issuing bonds and stocks indiscriminately and a lack of management, loopholes in the law, resulting in companies unable to repay bond principal and interest in full and on time. Bond investors have filed complaints, forcing the State to intervene.
Chairwoman Man stated that the proposed ratio of not exceeding five times was based on feedback and suggestions from various ministries and sectors. The Government affirmed that this ratio would not significantly impact capital mobilization for production and business activities.
“Can the Government clarify whether this ratio stipulated in the law will affect its leadership, management, and administration? Which option is optimal: specifying the ratio in the law or delegating the Government to detail this ratio through implementation guidelines?” asked Chairwoman Man.
In response, Minister Nguyen Van Thang explained that the Government would soon issue a decree related to the Securities Law, including a clause on private bond issuance limited to five times the owner’s equity.
Mr. Thang shared that the Government had sought opinions and worked extensively on this matter over the past year to determine the appropriate ratio. Currently, different countries have different regulations, with some allowing three times and others five times the owner’s equity.
The Minister affirmed that this regulation aims to ensure that enterprises with a genuine need for capital, operating with transparency and honesty, can continue to issue bonds to raise funds.
On the other hand, this regulation will also restrict and eliminate dishonest enterprises that take advantage of private bond issuance regulations for their gain, as has happened in the past. Therefore, he proposed keeping the ratio at five times in the law, as mentioned in the draft.
Luân Dũng
– 12:02 09/06/2025
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