MR. KENT WONG QUOTED IN VIETNAM INVESTMENT REVIEW, SUGGESTING STRONGER LEGISLATION FOR VAMC’S NEW DEBT TRADING PLATFORM
On October 29, 2021 Mr. Kent Wong, Partner and Head of Banking & Capital Markets at VCI Legal, was interviewed by Vietnam Investment Review, regarding the Vietnam Asset Management Company’s (“VAMC”) new trading platform for credit institutions’ bad debt.
On October 15, 2021, VAMC launched a debt exchange platform, a first for Vietnam, to set the foundation for trading distressed assets. The platform has been joined by around 30 members so far, with the majority being debt trading companies backed by commercial banks, despite unresolved legal issues.
The settlement of credit institutions’ bad debts is guided by the National Assembly’s Resolution No.42/2017/QH14. However, since Resolution 42 will expire in August 2022, there is a dire need of new legislation.
Mr. Kent Wong expressed the opinion that a stronger legal framework is necessary for debt trading, in order to cover debt securitization and other non-performing loan-type debt instruments. As the Chairman and a member of the Real Estate Working Group of EuroCham’s Legal Sector Committee, Mr. Wong also remarked that the most problematic matter is how to deal with collateral in case debtors do not cooperate, or the issue of foreign investor ownership when security assets are backed by land use rights. Foreign investors are unable to own land use rights.