Question

Thai Hoang Joint Stock Company is seeking to raise additional equity finance. The board of management of the company is negotiating with Hai, a wealthy inventor, in the hope that he will purchase new shares in the company.

Hai has expressed an interest in this investment but has insisted on several conditions. He wants to be guaranteed a position on the board of management for a minimum of three years. He also wants the board of management to sign an undertaking that he will be paid a minimum annual return on his shares of 6%. Hai has specified that all his shares must be paid before any other shareholders if the company is bankrupt.

Required: Discuss the extent to which the board of management of Thai Hoang JSC will be able to meet Hai's demands with the respect to the rules under Vietnamese law.