ASEAN KEY DESTINATIONS
Local firms fail miserably with information disclosure
Only about 17 per cent of listed companies comply with information disclosure regulations, lower than the figure in 2016, according to the Vietnam Association of Financial Executives (VAFE).
The figure was reported by VAFE in its latest survey on companies that are listed on both the HCM City and Hà Nội stock exchanges over their compliance of information disclosure regulations.
Information disclosure is an obligation that listed companies, whose shares are traded on the two local exchanges, must fulfill to prove their transparency and accountability towards investors and shareholders.
The latest VAFE survey consisted of 672 firms whose shares were traded on the HCM and Hà Nội stock exchanges between July 1, 2016 and June 30, 2017.
According to VAFE, the latest result was slightly lower than the number in 2016 (18.47 per cent), but higher than between 2012 and 2015.
Of the surveyed companies, 22 firms or three per cent of the total were large-cap companies, 140 companies or 21 per cent were mid-cap, and 76 per cent were small- and micro-cap firms.
Large-cap companies have market capitalisation of at least VNĐ10 trillion (US$444.4 million), the number for mid-cap firms is VNĐ1 trillion, and the market value of small- and micro-cap firms is at most VNĐ100 billion.
According to the survey, large-cap firms had the highest percentage of companies complying with information disclosure regulations (50 per cent), while the group of small- and micro-cap firms had the lowest percentage (12.35 per cent).
VAFE reported that most violations were delayed release of financial reports and late announcement of annual shareholder meetings. Inappropriate compilation of financial reports was also a common violation among surveyed firms, committed by 30 per cent of surveyed firms.
Specifically, the fourth-quarter earnings-report season saw the highest number of inappropriate financial reports (242 companies or 36 per cent of the total), followed by the third-quarter earnings-report season (219 companies or 33 per cent).
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