Abstract

De facto control in credit institutions is an important legal issue in banking governance, risk management, and financial system stability. De facto control may arise through ownership relationships, voting rights, affiliated relationships, or agreements among parties, enabling an individual or organization to exercise significant influence over the governance and management of a credit institution without necessarily holding a controlling ownership interest. This article examines the legal framework for identifying de facto control in Vietnamese credit institutions, with particular focus on the relationship among ownership rights, voting rights, legal control, and de facto control. It also analyzes existing legal mechanisms governing related persons, cross-ownership, credit exposure limits, and the responsibilities of managers and executives. The article identifies several legal issues, including difficulties in determining persons exercising de facto control, the concealment of control relationships through complex ownership structures and affiliated relationships, and limitations in supervisory mechanisms and in addressing abuses of control. It proposes legal reforms aimed at strengthening the identification of persons exercising de facto control, enhancing transparency in ownership and control relationships, improving supervisory effectiveness, and establishing mechanisms to prevent and address the manipulation of credit institutions.

Keywords: Credit institutions, cross-ownership, de facto control, related persons.