From Omega to Alpha: Key legal considerations for listed companies when management personnel are subject to criminal proceedings

In just the first few months of 2026, Vietnam’s securities market has witnessed a number of cases involving senior executives and key personnel of listed companies being subject to criminal proceedings across various sectors, from chemicals and infrastructure to energy. This is no longer a theoretical risk, but a practical legal and corporate governance challenge for which every public company should have an appropriate response plan in place.

This article is titled “From Omega to Alpha” to reflect the moment when such an event occurs and marks the beginning of a new chapter for the company. It represents not merely a change in leadership personnel, but also the commencement of a broader process of reform and restructuring aimed at enabling the company to overcome challenges and continue its sustainable growth. Nevertheless, such events often leave behind significant legal and governance implications that require careful attention and resolution.

This article provides an analysis of the current legal framework and highlights the key legal issues that the company’s management and legal/compliance departments should understand and address when such circumstances arise.

1. Mandatory disclosure of extraordinary information – an immediate obligation independent of the outcome of a criminal investigation

Under applicable securities regulations, a public company is required to disclose extraordinary information within 24 hours from the occurrence of a triggering event, including where the company receives a decision to initiate criminal proceedings against its managers or insiders, or a decision on detention or criminal prosecution against an insider of the company [1].

The term “insider” includes, among others: the Chairperson of the Board of Directors, Chairperson of the Members’ Council, or Chairperson of the company; members of the Board of Directors or Members’ Council; the legal representative; General Director (Director), Deputy General Director (Deputy Director), Chief Financial Officer, Chief Accountant, and other equivalent managerial positions appointed by the General Meeting of Shareholders, Board of Directors, Members’ Council, or Chairperson of the company; Head of the Supervisory Board and members of the Supervisory Board (Controllers); members of the internal audit committee; company secretary; person in charge of corporate governance; and the person authorized to disclose information [2] (collectively referred to as “Management Personnel”).

From a legal perspective, companies should pay particular attention to the following matters:

• The disclosure obligation arises upon the company’s receipt of a decision issued by the competent procedural authority, rather than from the date on which the investigation authority issues such decision, and is not dependent on whether the criminal case has reached a final conclusion.
• The disclosed information must clearly state the relevant event, its cause, and remedial measures (if any) [3]. In practice, at the initial stage of disclosure, companies may not yet be in a position to determine the cause of the incident or identify appropriate corrective measures. In such circumstances, some companies may provide updates stating that they are closely cooperating with the investigation authorities to clarify the matter, while their production and business operations continue normally, in order to maintain market confidence and reassure stakeholders.
• Practical developments indicate that where an incident occurs in multiple stages, for example, where different individuals are subject to criminal proceedings at different points in time, each subsequent development may trigger a separate and independent obligation for the company to make additional disclosures.

Legal risks arising from non-compliance:

Failure to disclose extraordinary information or disclosure made beyond the prescribed timeline may result in administrative penalties ranging from VND 50 million to VND 100 million [4]. In addition, such non-compliance may constitute one of the grounds for the Stock Exchange to place the company’s shares under warning status, supervision, trading restriction, or other applicable control measures.

2. Key legal considerations where the legal representative is subject to criminal proceedings and/or detention

Where the Chairperson of the Board of Directors, Chairperson of the Members’ Council, or the General Director (Director) – particularly where such individual also serves as the company’s legal representative – is subjected to preventive measures such as detention pending investigation, significant legal issues may arise regarding the authority to represent the company, execute contracts, and approve corporate documents.

Article 12.2 of the Law on Enterprises 2020 [5] permits a company to have more than one legal representative. Accordingly, where a company has multiple legal representatives and only one of them is subject to criminal proceedings and/or detention, the remaining legal representative(s) may continue to perform the company’s day-to-day legal and operational functions, including executing contracts and approving internal corporate documents, thereby ensuring the uninterrupted operation of the business.

However, where a company has only one legal representative and that individual is subject to criminal proceedings and/or detention, the Members’ Council or the Board of Directors, as the case may be, must appoint another individual to serve as the company’s legal representative [6]. In addition, in the case of a two-member limited liability company, where an individual member is subject to criminal proceedings and/or detention, the remaining member shall automatically act as the company’s legal representative for the duration of such circumstances [7].

Vietnamese corporate law provides a number of statutory mechanisms to ensure business continuity where the company’s legal representative is unable to directly manage and operate the enterprise. Accordingly, if the legal representative is subject to criminal proceedings and/or detention, the company should promptly implement appropriate corporate governance measures to ensure that its legal representation remains valid and compliant with applicable law, thereby minimizing the risk of challenges to the validity and enforceability of transactions entered into with business partners during this period.

3. Key legal considerations regarding the presumption of innocence and internal employment procedures

The presumption of innocence is a fundamental principle of criminal procedure law. Under this principle, a person charged with a criminal offence is presumed innocent until proven guilty in accordance with the procedures prescribed by law and a legally effective conviction has been rendered by the court [8]. This principle applies throughout every stage of the criminal process – from the initiation of criminal proceedings, investigation and prosecution to trial – and ceases to apply only when the court’s conviction becomes legally effective.

Accordingly, a person who has been subject to criminal proceedings or detained pending investigation is not deemed guilty at that stage. As a result, the individual’s fundamental employment rights remain protected. Listed companies should therefore ensure that any internal employment measures are implemented in compliance with applicable labor laws. In particular:

• Suspension of the employment contract.

Where an employee is placed in temporary detention or custody in accordance with the criminal procedure code, the employer may suspend the performance of the employment contract [9]. Conversely, where an employee is merely subject to criminal proceedings but has not been detained or taken into custody, the employer is not entitled to suspend the employment contract on that basis alone.

During the suspension period, the employer is generally not required to pay salary or perform other employment-related obligations, unless otherwise agreed by the parties or required by law [10].

• Disciplinary dismissal following a criminal conviction.

Where an employee is convicted of offences such as theft, embezzlement or gambling committed at the workplace, the employer may impose the disciplinary sanction of dismissal [11]. However, Vietnamese labor law prescribes strict procedural requirements for disciplinary dismissal. In practice, employers may consider one of the following approaches:

First, where the employee is convicted of such offences and sentenced to a fixed-term imprisonment, the employment contract automatically terminates pursuant to Article 34.4 of the Labor Code 2019. In this case, the employer only needs to issue a decision confirming the termination of the employment contract.

Second, where the employee is convicted of such offences but receives a suspended sentence, the employment contract does not terminate automatically. The employer may instead initiate disciplinary proceedings and, where all statutory conditions and procedures are satisfied, impose dismissal as a disciplinary measure.

Employers should avoid prematurely unilaterally terminating an employment contract or imposing disciplinary dismissal solely because an employee has been subject to criminal proceedings and/or detained pending investigation. Failure to comply with the statutory requirements may expose the employer to significant legal risks and liabilities arising from unlawful unilateral termination of employment or unlawful disciplinary dismissal.

4. Key legal considerations regarding continued listing and mandatory delisting

A common misconception is that the criminal prosecution and/or detention of a company’s Management Personnel automatically results in the company’s shares being delisted. This is not the case. Vietnamese securities laws prescribe 12 circumstances under which the shares of a public company may be subject to mandatory delisting [12]. None of these circumstances is triggered solely because the Management Personnel has been subject to criminal proceedings or detained pending investigation [13].

From a legal perspective, the potential impact of criminal proceedings involving Management Personnel on a company’s listing status may generally be analyzed under the following two scenarios.

First, the criminal proceedings and/or detention arise from conduct constituting securities law violations that may ultimately result in mandatory delisting of the company’s shares. Such violations include [14]:

• directly or indirectly engaging in fraudulent or deceptive conduct; forging documents; fabricating false information; making false or misleading disclosures; concealing or omitting material information in a manner that seriously affects securities offerings, listing, trading, investment activities or the provision of securities services;
• using inside information to trade securities for one’s own account or for the benefit of another person, or disclosing inside information or advising others to trade securities on the basis of such information;
• using one or more securities trading accounts, whether owned by oneself or others, or acting in concert with other parties to create artificial supply or demand; colluding or inducing others to trade securities for the purpose of manipulating market prices; or combining trading activities with the dissemination of false rumors or misleading information to manipulate securities prices; and
• organizing a securities trading market in violation of the Law on Securities 2019.

In such circumstances, following a final criminal conviction of the relevant Management Personnel, the listed company itself may also become subject to regulatory enforcement for the underlying securities law violations. As a consequence, its listed securities may be subject to mandatory delisting.

Second, the criminal proceedings and/or detention do not relate to any conduct that constitutes a statutory ground for mandatory delisting. In this scenario, the risk of mandatory delisting arises not from the criminal proceedings themselves, but from how the company responds to the resulting corporate governance crisis. Key considerations include whether the company continues to comply with its disclosure obligations,

convenes shareholders’ meetings as required, and submits its audited financial statements within the statutory deadlines.

Experience from previous mandatory delisting cases demonstrates that where members of Management Personnel are criminally prosecuted, detained, and subsequently convicted, the company may lose the managerial capacity and human resources necessary to fulfil the extensive compliance obligations applicable to listed companies. This often leads to a series of serious regulatory breaches, which may ultimately constitute independent statutory grounds for mandatory delisting.

This is perhaps the most important legal takeaway for listed companies: the company’s ability to maintain regulatory compliance and sound corporate governance throughout a crisis – not the criminal proceedings themselves – is often the determining factor in preserving its listing status. To mitigate the risk of mandatory delisting, listed companies should, among other things:

• conduct a comprehensive review of their statutory obligations applicable to listed companies, particularly with respect to periodic and extraordinary information disclosure requirements and the timely submission of audited financial statements; and
• implement an appropriate business continuity and succession plan to ensure that the company’s governance structure and business operations continue to function effectively, thereby reducing the risk of prolonged losses or accumulated losses exceeding the company’s paid-in charter capital as reflected in its financial statements.

5. Key legal considerations regarding the scope of criminal liability of legal entities

Vietnamese criminal law establishes separate and independent regimes for the criminal liability of legal entities and individuals. Accordingly, a company constitutes a legal entity separate from its Management Personnel. The criminal liability of an individual does not automatically give rise to the criminal liability of the commercial legal entity, and conversely, the criminal liability of a commercial legal entity does not exclude the criminal liability of the relevant individuals [15]. This clear distinction is of significant importance in protecting the company’s assets, reputation, and ability to maintain business continuity.

A commercial legal entity may only be subject to criminal liability where the relevant criminal conduct satisfies the conditions prescribed under Articles 75 and 76 of the Criminal Code, including:

• the criminal offence is committed in the name of the commercial legal entity;
• the criminal offence is committed for the benefit of the commercial legal entity;
• the criminal offence is committed with the direction, management or approval of the commercial legal entity;
• the statutory limitation period for criminal prosecution has not expired; and
• the offence falls within the list of offences for which commercial legal entities may bear criminal liability.

Based on recent cases arising in the first half of 2026, whether the criminal liability of Management Personnel may also result in criminal liability of the company depends on the specific type of offence for which the relevant individual is prosecuted.

First, with respect to accounting-related offences causing serious consequences: Where, during the investigation, prosecution or trial process, the court determines that the Management Personnel has committed offences such as tax evasion (Article 200 of the Criminal Code) or illegal printing, issuance or trading of invoices and payment documents relating to state budget collection (Article 203 of the Criminal Code), the company may, in addition to the Management Personnel’s criminal liability, also may be subject to criminal liability as a commercial legal entity for such offences.

Second, with respect to offences relating to positions and authority, such as embezzlement of property (Article 353 of the Criminal Code) or giving bribes (Article 364 of the Criminal Code):These offences are, under Vietnamese law, applicable only to individuals holding relevant positions or exercising managerial authority. Commercial legal entities are not subject to criminal liability for these offences.

Third, with respect to environmental offences and illegal exploitation of natural resources:Certain offences, including violations of regulations on research, exploration and exploitation of natural resources (Article 227 of the Criminal Code) and environmental pollution (Article 235 of the Criminal Code), may give rise to criminal liability for both individuals and commercial legal entities.

Where a commercial legal entity is held criminally liable, it may be subject to sanctions including monetary fines, suspension of operations for a definite period, permanent cessation of operations, prohibition from conducting business activities or operating in certain sectors, prohibition from raising capital, and certain judicial measures applicable to convicted legal entities [16]. In addition to criminal liability, a legal entity may also be subject to administrative sanctions and civil liability for damages (where applicable).

Given that criminal liability of a commercial legal entity requires proof that the criminal conduct was committed in the name of, for the benefit of, and with the direction, management or approval of the legal entity, companies should maintain complete and systematic records of resolutions and meeting minutes of the Board of Directors, Members’ Council, Board of Management/Executive Management, authorization documents, delegation of authority policies and other relevant internal governance documents.

Such documents may serve as important evidence, where necessary, to establish whether a specific act committed by Management Personnel was performed for the benefit of the company, whether such act exceeded the authority granted to that individual, and thereby protect the company’s legitimate rights and interests in the event of allegations of corporate criminal liability.

6. Conclusion

The criminal prosecution of Management Personnel of a listed company is not merely a criminal procedural event; it may also trigger a series of interconnected legal and corporate governance issues requiring coordinated management and timely response.

The company must simultaneously ensure compliance with mandatory disclosure obligations under securities regulations; implement appropriate measures to mitigate the risk of its shares being placed under warning, supervision or other regulatory control measures by the Stock Exchange; promptly strengthen its governance structure and identify authorized persons capable of representing, executing transactions and managing the company; handle employment matters involving the prosecuted individual in accordance with labor regulations; and assess the potential legal liability of the company itself on a case-by-case basis. Each of these issues is governed by separate legal regimes and requires strict compliance with applicable procedures, proper authority and appropriate timing.

In this context, the decisive factor is not the occurrence of the criminal prosecution itself, but rather how effectively the company responds to and manages the legal risks arising from such event. A company with a well-established crisis management framework, a pre-arranged succession mechanism for key personnel and timely access to legal advice will be better positioned to maintain stable operations, ensure regulatory compliance and minimize adverse impacts on its business activities, shareholders and investors.

Conversely, delays in taking appropriate action, incorrect application of legal requirements, or insufficient coordination among relevant departments may transform an event initially involving only an individual’s liability into broader legal, governance and reputational risks affecting the entire enterprise.

1. Circular No. 96/2020/TT-BTC dated 16 November 2020 of the Ministry of Finance on information disclosure in the securities market (“Circular 96”), Article 11.1(n).
2. Law on Securities No. 54/2019/QH14 dated 26 November 2019, as amended and supplemented by Law No. 56/2024/QH15 dated 29 November 2024 (“Law on Securities 2019”), Article 4.45(a).
3. Circular 96, Article 11.2.
4. Decree No. 156/2020/ND-CP dated 31 December 2020 on Administrative Sanctions for Violations in the Securities and Securities Market Sector, as amended and supplemented by Decree No. 306/2025/ND-CP dated 25 November 2025, Article 42.4.
5. Law on Enterprises No. 59/2020/QH14 dated 17 June 2020, as amended and supplemented by Law No. 03/2022/QH15 and Law No. 76/2025/QH15 (“Law on Enterprises 2020”).
6. Law on Enterprises 2020, Article 12.5.
7. Law on Enterprises 2020, Article 12.6.
8. Criminal Procedure Code No. 101/2015/QH13 dated 27 November 2015, as amended and supplemented by Law No. 02/2021/QH15 and Law No. 99/2025/QH15, Article 13.
9. Labor Code No. 45/2019/QH14 dated 20 November 2019 (“Labor Code 2019”), Article 30.1(b).
10. Labor Code 2019, Article 30.2.
11. Labor Code 2019, Article 125.1.
12. Decree No. 155/2020/ND-CP dated 31 December 2020 detailing the implementation of a number of articles of the Law on Securities, as amended and supplemented by Decree No. 245/2025/ND-CP dated 11 September 2025 (“Decree 155”), Article 120.
13. For the purposes of this article, the analysis is limited to circumstances in which the mandatory delisting of a company’s shares may arise in connection with the criminal proceedings and/or detention of the company’s Management Personnel.
14. Decree 155, Article 120.1(l).
15. Criminal Code No. 100/2015/QH13 dated 27 November 2015, as amended and supplemented by Law No. 12/2017/QH14 and Law No. 86/2025/QH15 (“Criminal Code”), Article 75.2.
16. Criminal Code, Articles 77, 78, 79, 80, 81 and 82.