Sacombank’s board of directors (BOD) may be dissolved to pave the way for BOD reelections if shareholders want so at a general meeting, lawyer Tran Phuong Bac at Luat Viet law firm said.

This is in stark contrast to what Dang Van Thanh, chairman of Saigon Thuong Tin Commercial Bank (Sacombank), has said. Speaking to the media, Thanh implied the incumbent BOD could not be dissolved.

“The BOD of the term 2011-2015 was elected at the general meeting of the bank and fulfilled the business plan for 2011, the first year of the five-year term. The central bank also approved the board in line with the Law on Credit Institutions,” Thanh said.

The BOD reelection issue burst into the spotlight after Vietnam Export Import Commercial Bank (Eximbank) as a majority shareholder of Sacombank floated a call for reelections of Sacombank’s boards of directors and controllers on Monday.

Lawyer Bac on Tuesday affirmed that Thanh’s statements lacked legitimacy.

According to the Enterprise Law, shareholders at a general meeting have the power of electing or dismissing the BOD. A reelection should take place if it wins a vote of at least 65%, Bac explained.

Whether Eximbank has the right to pick representatives to sit on the BOD is another matter, Bac said, adding shareholders or groups of shareholders who hold more than 10% to below 20% of shares could recommend one person for the BOD if they held their shares for at least six consecutive months.

Eximbank, Bac noted, has been holding a 9.73% stake in Sacombank since January 10, so it is not eligible to call a general meeting or recommend a person for the BOD.

Acquisitions of large volumes of Sacombank shares have been a hot topic in local media in recent times. According to a manager of a securities enterprise, this might be a “hostile takeover” plan as there has been no public bids, nor price negotiations or discussions.

Given risk of being taken over, Sacombank has taken prompt measures such as launching share repurchases and collecting authorizations from staff to increase its voting right in the upcoming general meeting.

Sacombank whose stock code is STB has steadily led the market in terms of liquidity over the past months while there have appeared rumors on possible ownership restructuring. Three major shareholders, Dragon Capital, ANZ Bank and Refrigeration Electrical and Engineering Joint Stock Co., have divested all their stakes in Sacombank.

The Saigon Times Daily