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Illustrated photo

Profit or loss

On March 8, 2017, at the press conference on the management and use of public cars, Mr. Tran Duc Thang, Director of the Public Asset Management Department under the Ministry of Finance released the statistics that during the past time, State agencies liquidated 761 public cars and earned 35.15 billion vnd.

On the afternoon of March 13, 2017, responding to different opinions on this figure, the Ministry of Finance issued a press release for further explanation. According to the report of the ministries, branches and localities on the results of settlement of redundant cars in the form of liquidation, and the information on car liquidation in the National Database on State assets (updated by ministries, branches and localities from January 1, 2016 to March 6, 2017), the Ministry of Finance listed 761 cars which were liquidated under the reports of the ministries, branches and localities with collected amount of 35.15 billion vnd.

By reviewing reports of the ministries, branches and localities, the Ministry of Finance has made statistics that among the liquidated cars, 90 cars were reported to be liquidated but have not been reported the collected amount to the Ministry of Finance ; 17 cars were reported to be liquidated in the form of dismantlement to be modeling tools for training of car repairs and vocational training equipment, and money was not collected, and 183 cars were too old and backward with the total collected amount of 5.4 billion vnd.

Therefore, the average price of 46.2 million vnd per each car from dividing the total liquidated cars by collected amount is only the initial information, which does not fully reflect the liquidation of assets as public cars. At present, the Ministry of Finance is still receiving reports of the ministries, branches and localities on the results of public car settlement to sum up to report to the Prime Minister.

This story makes us look back on the information "liquidation of 264 cars for work with the total original price of 79.68 billion vnd but the residual value was 390 million vnd " meaning that the value of each car on the book was only more than 1 million, that has ever caused a" storm "in the newspaper at the end of June, 2016.

Talking to a Customs correspondent, Mr. La Van Thinh, Deputy Director of the Public Asset Management Department under the Ministry of Finance acknowledged that to have a right view on this figure, we must clearly distinguish the two concepts of "residual value" and "collected amount".

For public assets, Clause 4 of Article 2 of the Law on management and use of State assets stipulates: "State property must be fully accounted in kind and value as prescribed by law. The determination of the value of assets in transaction of trading, renting, leasing, joint business and joint association, liquidation of assets or in other transactions conducted in accordance with the market mechanism, except other cases described by law”.

When mentioning the value of public assets, people are concerned about their original price (original purchasing value) and the residual value (the actual value at the time of accounting after depreciation).

For example, for the case that 246 cars have an original purchasing price of 79.68 billion vnd and their current residual value was 390 million vnd, meaning that the average price of each car was only more than 1 million vnd

The clear determination of the value of used cars based on the original price and the residual value in each time demonstrates the scientific management and transparency of the State agencies. Also, this reflects the fact that many used public cars are too old.

Even so, according to Mr. Thinh, the collected amount from the sale of assets may change depending on the market price and buyer's demand for the product auction. There was the case where a public car is worth 0 vnd in the books, but because it is an antique car and many people like it, the sale of the car can earn billions of vnd

Thus, public cars with residual value in the books are extremely low, but they are sold at an average price of 46.2 million vnd per each, it can be profit rather than cheap, as rumors.

Liquidation liability belongs to the using units

Also from the point of view that the selling prices of car are much cheaper than their original prices , leading to doubts and suspicion to the Ministry of Finance in the liquidation of old public cars.

However, in fact that the liquidation of public cars in particular and public assets in general are being implemented quite seriously under the provisions of Article 25 of Decree No. 52/2009 / ND-CP detailing and guiding the implementation of the Law on Management and Use of State Property.

In which, the qualified jurisdiction for asset liquidation belongs to the ministers and the Chairmen of the local People's Committees, rather than to the Ministry of Finance. After these levels issued Decision on asset liquidation, the asset management agencies shall take the assets to public auctions according to the law.

The agencies must base on the accounting to determine the value of the assets before the auction. Everyone has the right to buy these assets. The auction process, from posting announcements to organizing auctions must be clearly prescribed.

Liability of the Ministry of Finance

According to the Law, the public asset management agencies now implement their obligations which are monitoring the liquidation conditions when the Decision of liquidation is issued. Actually, from 2010, the Public Asset Management Department under the Ministry of Finance has applied the IT into the management and supervision. Currently, the ministries, branches and localities only update to the online database after 30 days after fluctuations in assets (buy or sell). This database managed by the Ministry of Finance is information in the accounting books of the agencies as well as of the country.

If the liquidation of assets is conducted in the form of auction, the agencies, organizations or units assigned by the ministries, branches and localities shall have to sell them publicly and transparently according to the provisions of Decree No. 17/2010/ND-CP on auction of property. After completing the liquidation, the ministries, branches and localities shall sum up and report them to the Ministry of Finance.

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In other words, the Ministry of Finance only take the responsibility to sum up data from reports of ministries, branches and localities besides monitoring the liquidation conditions.