23:34 (GMT +7) - Tuesday 12/12/2017

Vietnam Today

State assets must be secured during SOE equitization

Released at: 20:10, 07/12/2016

State assets must be secured during SOE equitization

Photos: Duc Anh/VGP

Prime Minister requests that the State must not incur losses in the future during State-owned enterprises equitization process.

by Duy Anh

Prime Minister Nguyen Xuan Phuc has called for the equitization process of Vietnam during the 2016-2020 period to be faster, clearer, and stricter, with the value of land use rights no longer incurring a loss for the State.

“The discussion on the determination of land use rights for enterprises is essential”, Prime Minister Nguyen Xuan Phuc said, when he chaired the national videoconference implementing the rearrangement and renovation of SOEs during the 2016-2020 period.

Decree 59 sets a 30-day time limit for local administrations to give their official opinions on land prices to be applied to equitized enterprises. Some provinces have stated that the time allowed was too short, making the valuation of lands inaccurate.

Recently, during the divestment of State capital in two beer giants- the Hanoi Beer Alcohol and Beverage Corporation (Habeco) and the Saigon Beer Alcohol and Beverage Corporation (Sabeco), the Vietnamese leader called for the land use rights to be taken into account during the valuation process.

“A full and complete discussion over a regulatory change will be made, as Decree 59 on the conversion of enterprises with 100 per cent State-owned capital into shareholding companies has shown inadequacies”, the PM told the gathering.

Figures from the Steering Committee for Enterprise Renewal and Development revealed that the number of SOEs has declined significantly from some 6,000 in 2001 to 718 as at the end of October 2016, focusing on 19 sectors. However, the proportion of stakes sold only accounted for 8 per cent of the total capital that the State is holding.

There is a need to determine the sectors that the State should entirely divest from. “The classification list of SOEs is in my hands”, PM Phuc said. One thing holds the Vietnamese leader back, “how much should the dominant shares be in sectors that the government needs to control?”

During the next five years, the State will only hold 100 per cent of the capital in key sectors. “Those that the State does not need to hold controlling stakes in will have to conduct equitization in accordance to the market mechanism, ensuring transparency and avoiding a loss of the State’s assets,” said Vice Chairman of the Office of the Government Mr. Le Manh Ha.

“Those who deliberately slow down the equitization process, or do not want to be privatized, will be liable for their actions”, said PM Phuc. The removal of all legal obstacles in the equitization process, development of evaluation systems for equitized enterprises, and the application of international corporate governance practices will be set.

During the first 11 months of this year, the military-run telecom operator Viettel, the Vietnam National Textile and Garment Group (Vinatex), the State Capital Investment Corporation (SCIC), the Vietnam Northern Food Corporation (Vinafood1), and eight corporations under the Ministry of Construction (MoC) and Hanoi, sold the State stakes in other enterprises worth VND2.8 trillion ($123.2 million), bringing in VND5.08 trillion ($223.6 million).

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