GOVERNMENT REGULATIONS ON VALUATION THE STARTING OF BAD DEBTS

On May 16, 2017, the Government issued Decree No. 61/2017/ND-CP detailing the appraisal of the starting price of bad debts, collateral for bad debts and the establishment of the Association. bad debt auction contract, bad debt security for bad debt, bad debt security asset of great value as follows:

Accordingly, the scope of regulation of this Decree details Clause 4, Article 65 of the Law on Property Auction, including: Appraisal of the starting price of bad debt, collateral of bad debt in case of bad debt. an organization in which the State owns 100% of the charter capital established by the Government to deal with bad debts of a credit institution that auctions itself and hires an auctioneer to conduct an asset auction; The establishment of the bad debt auction council, the collateral of bad debt for bad debt, the collateral of bad debt has great value in case the organization in which 100% of the charter capital is owned by the State. regulations established by the Government to deal with bad debts of self-auctioning credit institutions.

The Decree clearly stipulates cases in which the starting price of bad debts must be appraised, including: Bad debts purchased by the Vietnam Asset Management Company at book value by special bonds, which when determining the starting price for auction price, the Asset Management Company could not reach an agreement with the debt-selling credit institution on the starting price; The bad debt was purchased by the Asset Management Company at market value; The collateral of the bad debt that, when determining the starting price for auction, the Asset Management Company cannot agree with the guarantor on the reserve price.

The selection of price appraisal enterprises specified in this Decree must ensure the principle: The selected price appraisal enterprises must be on the public list of price appraisal enterprises eligible for price appraisal activities of the Ministry of Finance. main; The selected price appraisal enterprise is not eligible for price appraisal according to the provisions of the Law on Prices and its guiding documents.

The valuation enterprise shall appraise the starting price of the bad debt, the collateral of the bad debt in accordance with the provisions of the Law on Prices and its guiding documents.

The rights and obligations of the Asset Management Company in the case of having to appraise the starting price of a bad debt or the collateral of a bad debt are prescribed as follows: Selecting an asset valuation enterprise according to regulations specified in this Decree; Sign a price appraisal contract with the valuation enterprise; To provide dossiers, documents and data related to bad debts, security assets of bad debts subject to valuation for valuation enterprises; To authorize a debt-selling credit institution to carry out the activities specified above in case the bad debt, the security property of the bad debt is purchased at book value by special bonds; On the other hand, to exercise other rights and obligations as prescribed by law.

The Decree also specifies the use of valuation results to determine the starting price of bad debts and collateral for bad debts.

Accordingly, in the case of having to appraise the starting price of a bad debt or the collateral of a bad debt, the Asset Management Company shall decide the starting price of the bad debt or the collateral of the bad debt when the first auction on the principle that the starting price is not lower than the price of the bad debt, the collateral of the bad debt according to the price appraisal results.

In case the auction of bad debt or collateral is unsuccessful: For auction of bad debt purchased by the Asset Management Company at market value, the Asset Management Company will decide. starting price of bad debt. In case the Asset Management Company decides to reduce the starting price, each discount must not exceed 10% of the starting price of the previous unsuccessful auction.

For auction of bad debt purchased by VAMC at book value with special bonds, in case of continuing auction, VAMC will negotiate again with a credit institution. selling debt at the starting price of the bad debt. Within 07 working days from the date of deciding to continue the auction without reaching an agreement with the debt-selling credit institution, the Asset Management Company shall decide the starting price of the bad debt. In case the Asset Management Company decides to reduce the starting price, each discount must not exceed 10% of the starting price of the previous unsuccessful auction.

For the auction of collateral for bad debts, in case of continuing the auction, the Asset Management Company shall re-negotiate with the guarantor on the starting price of the security assets. Within 07 working days from the date of deciding to continue the auction without reaching an agreement with the guarantor, the Asset Management Company shall decide the starting price of the secured asset. In case the Asset Management Company decides to reduce the starting price, each discount must not exceed 10% of the starting price of the previous unsuccessful auction.

This Decree also contains articles and clauses specifying bad debts and collaterals of bad debts of great value; Establishment of bad debt auction council, collateral for bad debt; Principles of operation of the bad debt auction council, collateral for bad debts; Rights and obligations of the bad debt auction council, the collateral of the bad debt; Duties and powers of the Chairman, members of the bad debt auction council, the collateral of the bad debt.

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