Ho Chi Minh City, 10 July 2026
A shareholder’s ownership ratio directly impacts their voting power and economic interests. Decisions by the General Meeting of Shareholders (GMS) on charter capital increases, share issuances, or ownership changes are often highly contentious. Procedural lapses in convening, conducting, or adopting GMS resolutions can lead to serious disputes and dilution of shareholdings.
Drawing from a successful representation of a foreign investor, Indochine Counsel shares key lessons from this real-world case.
Background of the Dispute
The plaintiff, Mr. J. (a foreign shareholder), held 15% in G. Joint Stock Company, a foreign-invested enterprise in Vietnam. Between 2014 and 2016, the Company held multiple GMS meetings approving changes to company name, head office, legal representative, charter capital increases, and share transfers — without Mr. J.’s knowledge or participation.
Shockingly, the GMS minutes and resolutions falsely recorded Mr. J.’s attendance and bore forged signatures, even though he was not in Vietnam during the relevant periods. Relying on these documents, authorities issued amended Investment Registration Certificates and Enterprise Registration Certificates, diluting Mr. J.’s stake from 15% to 4.41%.
Indochine Counsel was engaged to protect Mr. J.’s rights. We initiated court proceedings seeking annulment of the disputed GMS resolutions on grounds of serious procedural violations under the Law on Enterprises and the Company’s Charter.
Court’s Decision & Key Legal Grounds
The Court of First Instance declared the relevant GMS resolutions null and void and ordered the Company to reconvene the meetings properly. The Appellate Court fully upheld this judgment.
Primary Grounds Upheld by the Court:
- Procedural Non-Compliance: The Company failed to prove that proper notices were sent to Mr. J. or that he attended any meetings. The convening and conduct of the GMS violated both the Law on Enterprises and the Company’s Charter.
- Forged Signatures: Evidence (including immigration records from the Vietnam Immigration Department) confirmed Mr. J. was not in Vietnam. Signatures on the GMS documents were inconsistent with his authentic signatures on other case file documents.
This outcome reinforces that GMS resolutions adopted in breach of mandatory procedures are invalid and can be successfully challenged.
Key Takeaways & Practical Recommendations
For Foreign & Domestic Investors:
- Thoroughly understand the Company Charter and relevant provisions of the Law on Enterprises regarding shareholder rights and GMS procedures.
- Actively monitor corporate governance — especially when holding significant stakes.
- Maintain complete records: Shareholders have the right to inspect, extract, and copy the Charter, GMS minutes, and resolutions. Request and retain these documents proactively.
- Seek timely legal advice at the first sign of irregularities.
For Companies & Boards of Directors:
- Ensure strict compliance with convening, notice, quorum, and voting requirements under law and the Charter.
- Maintain accurate, complete, and well-organized corporate records.
- The Board of Directors (and Supervisory Board where applicable) must fully understand their responsibilities to minimize disputes and regulatory risks.
Conclusion
This case highlights the critical importance of procedural compliance in corporate governance. When shareholder rights are infringed through improper GMS processes, Vietnamese courts provide effective remedies — provided strong evidence is collected and presented promptly.
For inquiries regarding shareholder disputes, corporate governance or related corporate matters, please get in touch with our team:
📧 info@indochinecounsel.com
☎️ (+84) 28 3823 9640
