Vietcombank General Shareholders' Meeting 2008: Puzzle Pieces

Monday, April 28, 2008
Vietcombank, one the largest commercial bank in Viet Nam held its first General Shareholders' Meeting on April 26, 2008. For the first time the name Viet Nam Joint-stock Bank for Foreign Trade has ever appeared. The meeting marked a new stage of development for Vietnam's most hitorically rich commercial bank.
However, much of its headache will still be ahead. The SGM was organized amid the stock market chaos, with Vietcombank's stock price plunged by about 50% compared to its IPO price in late 2007 (at the time VND 107,000/share). The majority of its shareholders attended the meeting appeared to be puzzled and concerned, given the current stock price on the free market priced in between VND 50,000-60,000/share. A disgruntled shareholder also tried to explain his computation that Vietcombank's stock price should have been around VND 14,000-22,000/share, a number that shocks everyone that is familiar with the evolution of Vietcombank's IPO since its issue of convertible bonds in 2006.
Domestic shareholders shared the view that the Vietcombank's stock might have been mistakenly priced during the IPO process. They complained there should have been ways to alleviate the current difficult situation. Alternatives should be taken taking into account its next steps of selecting a "strategic partner" and listing its stocks. Some suggested the bank purchase stocks to enrich treasury stock, creating liquidity and stopping the price from further drop.
CEO of Vietcombank, Nguyen Phuoc Thanh, unveiled the fact that the bank now faces a dilemma. The current market price of 50-60,000 would damage the trust of existing shareholders who bought Vietcombank stock at over 100,000. But if the bank thinks about any higher price than the market level, it could hardly identify a business partner, a critically important assignment of the BOD predefined at the outset of the IPO.
Vietcombank has now 15,500 shareholders, but they collectively hold only 9% of its equity. 91% remains with the State. All major decisions regarding the future of the bank will still be made by the government. Given its 15,500 shareholders, only 2,000 registered to attend the GSM, but only 700 showed up. The many shareholder left the GSM before the discussion session on the bank's business plan and the voting for this year's BOD. (Saga Viet Nam)