The private placement of corporate bonds (“CB“) constitutes a significant capital mobilization channel, requiring relevant parties to ensure information transparency and strict adherence to legal regulations. In August 2025, the Government Inspectorate (“GI“) issued Inspection Conclusion No. 276/KL-TTCP (“Conclusion 276“) regarding compliance with legal policies on the private placement of CBs and the utilization of proceeds derived therefrom. Conclusion 276 provides the results of the inspection concerning 67 issuing enterprises (“IEs“), including 05 credit institutions, 06 enterprises affiliated with Masan Group, 07 enterprises affiliated with T&T Group, 18 enterprises affiliated with Novaland Group, 20 enterprises related to Novaland Group’s affiliated companies, and 11 other enterprises, covering the period from 1 January 2015 to 30 June 2023.

This article addresses several prevalent non-compliances cited in Conclusion 276 and offers recommendations for IEs conducting private placement of CB to mitigate risks associated with the utilization of mobilized capital.

1. Requirements pertaining to the CB offering dossier and the information disclosure (ID) obligation of IEs

1.1. Relevant regulations concerning the preparation of the CB offering dossier and ID obligations applicable to IEs:

• IEs have the obligation to prepare the CB offering dossier, including key documents specified in detail at Article 12.2 of Decree 153.[1]
• IEs are legally responsible for the accuracy, truthfulness, completeness of the bond offering dossier and the disclosed information.[2]
• When executing ID, IEs must ensure the principle that the information is complete, provided timely within the required timeframe, specifically as follows:
• No later than 1 working day prior to the bond issuance date, the IE executes the pre-offering ID to the investors registered to purchase bonds and submits the ID content to the Stock Exchange.[3] The contents of the offering circular are specified in Article 3.1 and Appendix I of Circular 76.[4]
• No later than 5 working days from the date of completion of the CB offering, the IP must submit the ID content to the Stock Exchange,[5] the content of the ID regarding the bond offering results is stipulated at Article 4.1 and Appendix II of Circular 76.
• The IE is responsible for periodic ID (semi-annual, annual) concerning its financial condition, solvency and especially the status of utilizing proceeds from CB issuance in compliance with Article 21 of Decree 153. The periodic ID document must contain the content stipulated at Article 4.2 and Appendix III of Circular 76.

1.2. Some related violations discovered by the GI and cited in Conclusion 276:

• Some IEs when issue CB did not have a full set of basic documents as stipulated by the law. For example, the IEs only submitted separate financial statements but did not submit the consolidated financial statements for the year immediately preceding the issuance year.
• Some IEs did not execute information disclosure for some documents/information or the ID content was incomplete. For example, there are 4 credit institutions did not clearly state the disbursement time of proceeds from CB issuance in their offering circulars, and 1 credit institution did not establish a plan for capital sources and its utilization of the fiscal year regarding the CB issuance.
• Some credit institutions failed to comply with the deadline for executing the ID prior to the bond issuance.
• Some IEs affiliated with the Novaland Group failed to comply with the deadline for ID of bond issuance results, the content of the periodic CB issuance results ID was incomplete as legally stipulated, lacking information about collateral assets, asset value and bond issuance results.
• Many IEs failed to disclose on time or completely failed to disclose the report on the status of capital utilization, as well as the reports on the status of interest/principal payment as stipulated.
• Some IEs affiliated with the T&T Group, the content in the periodic offering circular regarding the status of capital utilization had inaccurate content concerning the actual disbursement into the project, not correctly complying with ID regulations.

1.3. Recommendations for IEs:

• IEs must fully prepare the components of the bond offering dossier and the content of the offering circular must comply with the regulations at Circular 76/2024.
• The documents and records proving the responsibility for managing and monitoring the purpose of CB capital utilization must be fully retained to ensure they can be presented upon receiving a request for inspection from competent authorities.
• IEs also need to note compliance with the deadline for executing the ID obligation, ensuring the accuracy, truthfulness concerning the content of the offering circular to ensure transparency and legal compliance.

2. Permissible purposes for bond issuance and principles for bond capital utilization

2.1. Relevant regulations concerning the permissible purposes for bond issuance and the principles for bond capital utilization applicable to IE include:

• The IE is only permitted to issue CBs to implement investment programs, projects, restructuring of the enterprise’s own debt or purposes for bond issuance as stipulated by specialized laws.[6]
• Article 13 of Decree 153 stipulates that the IE must specifically state the purpose of CB issuance in the issuance plan. Article 13.1(b) of Decree 153 further stipulates that the content of the bond issuance purpose includes (i) specific information about investment programs or projects (clearly stating the legal status and investment risks of the program or project); and/or (ii) the debt being restructured (specifically the value and maturity of the restructured debt).
• The IE also needs to clearly state (i) the plan for using the capital raised from the issuance of temporarily idle bonds in case of disbursement according to the progress of capital raised from the bond issuance;[7] and (ii) the plan for arranging sources and methods for paying interest and principal of bonds.[8]
• Article 34.2 of Decree 153 stipulates that the IE is responsible for managing and utilizing capital from the CB issuance in accordance with the issuance plan approved by the competent authority and legal regulations.

2.2. Some related violations discovered by the GI and cited in Conclusion 276:

• In the non-compliance of the IEs being affiliates of Masan Group where the purpose of CB issuance was to “increase the scale of enterprise operating capital, specifically for the payment of reasonable and legitimate expenses serving the production and business activities of the Issuing Organization…”, the GI concluded that the IE’s utilization of proceeds from CBs to compensate for debts that had been paid before the issuance plan was approved violated the regulation on determining the volume of issued bonds applicable at the time the enterprise issued CBs, and did not constitute a legitimate capital demand. Specifically, based on Article 6 of Decree 163/2018,[9] the IE determines the issuance volume based on the capital utilization demand, and the IE’s use of bonds to compensate for debt paid before the issuance is not considered as having a capital utilization demand for issuing CBs.[10]
• In the non-compliance regarding the utilization of proceeds from bonds by the IEs being affiliates of Novaland Group, the IEs used CBs to execute the transactions of receiving the transfer of charter capital of individuals from the target compaies. However, upon reviewing the cash flow related to the aforementioned transactions, the GI concluded that the formation of charter capital of individuals in the target companies showed signs of abnormality due to a large increase in capital value, the money used to increase capital by the individuals was all transferred by other companies, and the increased capital amount was then transferred away on the same day as the capital increase date; this indicates that the individuals’ charter capital did not exist in the target companies while the CB proceeds were used to receive the transfer of charter capital as stated above, and after receiving money from the CBs source, such individual shareholders transferred it to many other intermediary organizations and it eventually returned to the transferring company for the initial capital contribution.
• In the non-compliance of the Ies being affiliates of Novaland Group, the cooperating parties after receiving money from the IEs for improper purposes, not allocating a large value to the cooperation project for a long period, and the IEs are unable to fulfill the obligation to pay bond debt on time, posing potential risks to bondholders.

2.3. Recommendations for IE:

• The IE needs to specifically state the information in the purpose of bonds issuance, and align it with other documents in the bonds offering dossier, clearly stating the allocation of utilized proceeds, specific information about investment programs, investment projects, information about the debt, and the value of each restructured debt in accordance with Article 13.1 of Decree 153;
• In the bond issuance dossier, the IEs must not generalize the purpose of bond issuance as “for other permissible purposes as stipulated by law”, should not use general and contingency phrases, and clearly state information about each debt, and the value restructured for each debt;
• The IE needs to ensure the utilization of capital sources is in accordance with the content of the issuance plan approved by the competent authority, accompanied by documentation proving the capital utilization demand. Accordingly, the IE needs to ensure the utilization of mobilized capital from CB issuance is for the correct purpose according to the issuance plan as approved by the competent authority and the content in the offering circular as per Article 34.2 of Decree 153;
• The IE needs to note that when developing the CB issuance plan, they must develop a detailed capital utilization plan, determine the volume of issued bonds corresponding to the capital utilization demand, and list each corresponding debt with the value of utilized capital;
• For CBs with the purpose of issuance being to implement investment cooperation with other entities, the IE must be responsible for managing and monitoring the purpose of CB capital utilization, and must not delegate the full right to decide on the use of proceeds from CBs to the cooperating party.

3. Other Contents

The full and timely payment of bond principal and interest when due and the exercise of associated rights (if any) to bondholders according to the bond’s conditions and terms is the responsibility of the IE as per Article 34.3 of Decree 153. Accordingly, in the case of offering in the domestic market, if the IE is unable to pay the principal and interest debts of CBs on due time, they must negotiate with the bondholders to extend the payment term in compliance with the law. As of the time of the inspection in Conclusion 276, the Ies being affiliates of Novaland Group currently have a total outstanding debt of approximately 4,555 billion VND, including 4,166 billion VND in principal and 389 billion VND in interest, posing many potential risks and causing damage to the bondholders.

For CBs secured by assets, the IE must specifically state the type of collateral and the value of the collateral appraised by a valuation organization, the legal status of the collateral, the registration of security measures in accordance with the law on registration of security measures, and the payment priority of investors holding bonds when liquidating the collateral to pay the debt. The IE should note compliance with the regulations on registering security transactions with the security transaction registration authority as per Article 4 of Decree 99/2022/NĐ-CP dated 30 November 2022.

The non-compliances from Conclusion 276 show looseness in complying with regulations on issuance purpose, cash flow management, and information disclosure. The IE must establish a strict risk management and legal compliance system to maintain the sustainability and transparency of the CB market. Currently, the GI has requested the competent authorities, namely the Hanoi Stock Exchange and the State Securities Commission, to conduct a strict review, inspection, and supervision of enterprises, IEs, issuance and utilization of CB proceeds for the purpose of receiving the transfer of capital contributions, shares; real estate business in general and resort/tourism real estate in particular.

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[1] Decree No. 153/2020/ND-CP of the Government issued on 31 December 2020, stipulating the offering and trading of privately placed corporate bonds in the domestic market and the offering of corporate bonds to the international market, as amended and supplemented (“Decree 153”).

[2] Article 34.4 of Decree 153.

[3] Article 19.1 of Decree 153.

[4] Circular No. 76/2024/TT-BTC of the Ministry of Finance issued on November 06, 2024, guiding the regime of information disclosure and reporting on the offering and trading of privately placed corporate bonds in the domestic market and the offering of corporate bonds to the international market (“Circular 76”).

[5] Article 20.1 of Decree 153.

[6] Article 5.2 of Decree 153.

[7] Article 13.1(p) of Decree 153.

[8] Article 13.1(q) of Decree 153.

[9] Decree No. 163/2018/NĐ-CP of the Government issued on December 04, 2018, stipulating the issuance of corporate bonds, which expired on January 01, 2021 (“Decree 163/2018”).

[10] Article 34.1 and 34.2 of Decree 163/2018.