With the robust growth of Vietnam’s private placement CBs (“CBs”) market in recent years, the regulatory framework governing CBs issuances has been continuously tightened and refined, ensuring market openness, transparency, and risk mitigation. On 12 February 2026, the Government Inspectorate (“GI”) issued Notice No. 392/TB-TTCP regarding the inspection conclusions on compliance with legal policies of CBs in the private placement and the utilization of proceeds generated from such CBs (“Notice 392”).

Notice 392 provides inspection results for 26 organization issuers (“Issuers”) operating in various sectors—such as real estate, energy, commercial services, securities brokerage, manufacturing and business, and other industries—for the period from 1 January 2019 to 30 November 2024, with the total value of CBs issued during this timeframe approaching VND 120,000 billion. The inspection conclusions reveal that numerous limitations and inadequacies persist within the mechanisms and policies governing CBs issuance. Consequently, the Government is currently drafting a new decree to replace Decree 153/2020 which regulates the private placement and trading of CBs in the domestic market and the offering of CBs to international markets, which aims to rectify existing shortcomings, limitations, hurdles, and bottlenecks encountered during practical implementation, thereby strengthening state management over the CBs market.

This article will outline several common violations committed by Issuers as highlighted in Notice 392, with the objective of providing key considerations for the issuance process and the utilization of mobilized capital.

1. Key considerations for CBs dossiers across issuance stages

The regulations concerning fulfillment of offering conditions, dossier preparation, and information disclosure (“ID”) obligations imposed on Issuers demand absolute accuracy, completeness, and timeliness both before and after the issuance and offering of CBs. To fulfill ID obligations to the Hanoi Stock Exchange (HNX) via electronic documents[1], Issuers must either utilize an account on the dedicated CBs information portal registered on the website[2] or submit physical registration dossiers directly to the HNX. Several related violations discovered and addressed in Notice 392 include:

1.1. Pre-issuance Stage

a. Failure to submit bond issuance notices: CBs issuances must strictly adhere to the legislation in force at the time of issuance. Specifically, for CBs issued under Decree 90/2011 (which expired on 1 December 2019), Issuers were required to submit notices and register the CBs issuance with the Ministry of Finance[3]. However, under Article 53 of Decree 156/2020[4], Issuers are entitled to the application of newly enacted provisions since this specific non-compliant behavior has been abolished[5], and no legal liability provisions are further prescribed.

b. Violations of pre-issuance ID obligations: Numerous Issuers failed to disclose full mandatory contents prior to issuance, such as: the specific purpose of the issuance, the timeline for fund disbursement, the tentative issuance date, or comprehensive information regarding collateral. Certain Issuers delayed their pre-offering information disclosures beyond the statutory time limits, and in some extreme cases, failed to disclose the issuance plan entirely.

1.2. Post-issuance Stage

a. Failure to execute ID on offering results: Issuers are statutorily obligated to disclose information regarding the offering results to bondholders and submit the disclosed contents to the Stock Exchange within 5 working days from the completion date of the bond offering[6].

b. Violations of periodic and extraordinary ID obligations: Many Issuers failed to execute the disclosure of issuance results or completely neglected periodic disclosures (semi-annual and annual) regarding financial statements, the deployment status of bond proceeds, principal and interest payment statuses, and the fulfillment of commitments made to bondholders. Concurrently, enterprises delayed or omitted extraordinary ID upon the occurrence of critical events, including: late payments of principal/interest, premature bond repurchases, alterations to collateral, or amendments to the terms and conditions of the bonds.

c. Inaccurate ID: Several Issuers provided misleading disclosures compared to actual inspection findings regarding the timeline for early bond repurchases or the status of utilized capital that had undergone auditing.

2. Compliance with post-issuance regulations

Following a successful CBs issuance, Issuers must properly execute registration, depository, and collateral management procedures, and honor debt repayment obligations to bondholders to safeguard market stability. Notice 392 points out several violations regarding CBs post-issuance compliance as follows:

a. Delayed registration and depository at VSDC: Pursuant to Article 15.1 of Decree 153/2020, Issuers are required to register their bonds with the Vietnam Securities Depository and Clearing Corporation (VSDC) within 5 working days from the date of disclosing the CBs offering results. A number of Issuers failed to centralize their bond registration and depository within the VSDC system or the HNX, or failed to meet the statutory deadlines.

b. Absence of approved early repurchase plans: In accordance with Article 7.2 of Decree 153/2020, any plan for early bond repurchases must be formally approved by the competent authority of the Issuer, which is the exact same competent body that originally approved and ratified the CBs issuance plan.

c. Violations concerning CBs’ security measure: Several Issuers lacked sufficient collateral compared to their disclosed information, failed to register secured transactions, or failed to execute asset freezing orders on collateral consisting of shares/equity stakes. In many instances, the collateral was not eligible for mortgage, failed to maintain the minimum collateral ratio committed under the bond terms, or was not supplemented despite explicit requests mandated by bondholders’ resolutions.

d. Late payments and default on due debts: As of 30 November 2024, three prominent Issuers—namely Hung Thinh Investment JSC, Hung Thinh Quy Nhon Entertainment Service JSC, and Hung Thinh Land JSC—had completely lost their solvency. They have left massive principal and interest amounts overdue since 2023, totaling trillions of VND, which triggers systemic collapse risks, disrupts the capital market, and inflicts severe financial harm on thousands of individual investors.

3. Principles for the Management and Utilization of Bond Proceeds

Issuers bear full responsibility for managing and utilizing the capital raised from private placements in strict accordance with the approved and disclosed bond issuance plan[7]. Notice 392 identifies several severe infractions in this area:

a. Misappropriation of proceeds: Up to 14 Issuers violated in utilizing bond proceeds for purposes contrary to the approved issuance plans or the information disclosed to investors, which includes instances where Issuers unilaterally altered the purpose of capital utilization before obtaining a formal resolution from the bondholders’ general meeting[8].

b. Failure to manage and supervise proceeds usage: A number of Issuers transferred bond proceeds to partners under business cooperation contracts (BCCs) or injected capital into subsidiaries but failed to produce any supporting documentation or evidence proving that they checked, supervised, or managed the ultimate destination of these funds[9].

c. Violations of CBs issuance and utilization workflows: Certain Issuers collected and utilized bond proceeds prior to the official issuance date; deployed bond proceeds to make deposits for share acquisitions or capital contributions back in 2021 but left the transactions unexecuted for multiple years; or disbursed payments that exceeded the actual contractual values.

d. Unqualified investment programs and projects: Issuers funneled bond proceeds into deposits or business cooperations for real estate projects when such projects had not yet met the statutory legal criteria required to mobilize capital.

e. Illegal utilization of temporarily idle capital: The practice of Issuers deploying bond proceeds to extend loans or placing them into bank savings accounts prior to using them for the designated purposes of the issuance plan is deemed a violation. Nevertheless, the draft decree amending Decree 153/2020 is considering provisions that would allow Issuers to deposit idle cash or purchase certificates of deposit before disbursing funds according to the approved schedule.

4. Others

Based on the violations exposed in Notice 392, the GI has put forward stringent enforcement recommendations. Specifically, the GI requested the Ministry of Finance to direct the State Securities Commission and the HNX to conduct thorough reviews and impose administrative penalties on non-compliant Issuers; these entities must also be compelled to publish corrective/supplementary disclosures and urgently settle matured debts owed to bondholders.

Most notably, given the complex nature of the capital utilization infractions and the heightened systemic risks, the GI has officially forwarded the case files and violation details of 3 entities (Hung Thinh Land JSC, Hung Thinh Investment JSC, and Hung Thinh Quy Nhon Entertainment Service JSC) to the Ministry of Public Security for criminal investigation and prosecution under their jurisdiction.

The violations revealed in Notice 392 underscore the absolute urgency of complying with regulations on issuance purposes, cash flow management, and disclosure obligations. Moving forward, Issuers must take note of the following:

a. Ensure absolute satisfaction of all issuance conditions, and construct corporate resolutions approving issuance plans with clear, legally airtight contents.

b. Rigidly comply with deadlines and required contents for pre-issuance ID; establish internal tracking systems for disclosure calendars to ensure full, accurate, and timely submission of result reports, periodic reports (semi-annual and annual), and extraordinary reports whenever changes occur in debt obligations or collateral.

c. Maintain absolute adherence to the approved issuance plan and disclosed contents when deploying proceeds; enforce robust internal oversight mechanisms over bond cash flows, and ensure that cooperation funds are only disbursed into projects that are fully qualified to raise capital under the law.

———–

[1] Article 6.2 of Circular No. 76/2024/TT-BTC issued by the Ministry of Finance on 6 November 2024 providing guidelines on information disclosure and reporting regimes for private placements and trading of corporate bonds in the domestic market, and placements of corporate bonds in the international market.

[2] https://cbonds.hnx.vn/dang-ky-tai-khoan-chuyen-trang

[3] Article 30.1 of Decree No. 90/2011/ND-CP of the Government dated 14 October 2011 on the issuance of corporate bonds (expired on 1 December 2019) (“Decree 90/2011”).

[4] Decree No. 156/2020/ND-CP of the Government dated 31 December 2020 on penalties for administrative violations in the field of securities and the securities market, as amended (“Decree 156/2020”).

[5] Article 2 of Decree No. 128/2021/ND-CP of the Government dated 20 December 2021, amending and supplementing Decree 156/2020.

[6] Article 20.1 of Decree No. 153/2020/ND-CP of the Government dated 31 December 2020 on private placements and trading of corporate bonds in the domestic market, and placements of corporate bonds in the international market, as amended (“Decree 153/2020”).

[7] Article 5 of Decree 153/2020.

[8] Article 2 of Decree No. 08/2023/ND-CP issued by the Government on 5 March 2023, amending and supplementing Decree 153/2020.

[9] Article 34.2 of Decree 153/2020.

———- 

Disclaimer: This article has been prepared by PTN Legal LLC (‘PTN Legal‘) for the sole purpose of providing reference information to readers. PTN Legal makes no representation or warranty as to the accuracy or completeness of this information. The contents of this article may be changed, amended, or updated without prior notice. PTN Legal assumes no responsibility for any errors or omissions in this article, or for any damage arising from the use of this article in any circumstances. Readers who wish to receive articles from PTN Legal by email may register their information here.

Article prepared by Ms. Quach Mai Phuong, Associate