Listing a series of State-owned enterprises makinghuge losses and debts 

Ha Bac Fertilizer is a loss-making project named by the State Audit. Photo: Internet

Signs of financial insecurity

Recently, the State Audit has sent to the National Assembly a summary report on auditing results in 2019. In particular, the remarkable content is about the financial statements and activities related to management and use of state capital in 2018 of 235 enterprises under 36 groups, corporations and companies.

Specifically, the report shows that 31 of 36 audited enterprises made profits; return on equity and average income of employees in some companies is relatively high.

However, some companiesthat have the high debt to equity ratio, are Vietnam National Chemical Group (Vinachem); Vietnam Cement Group.

Specifically, Ha Bac Nitrogenous Fertilizer and Chemical Company Limited of Vinachem has a debt ratio of 73.72 times; for Lilama Corporation:Lilama 69-3 Joint Stock Company 9.17 times and the parent company 7.23 times.

In addition, Vinachemis unable to pay principal loans at the maturity date and overdue interest of VND1,000 billion as of July 31, 2019

Notably, many companies showedsigns of financial insecurity or were listed inspecial financial supervision such as Jetstar Pacific Airlines Joint Stock Aviation Company; Angkor Air, NinhBinhIntrogenous Fertilizer LTD.Company; Ha Bac Nitrogenous Fertilizer and Chemical Company Limited;and DAP-VINACHEM Joint Stock Company.

According to the State Audit, the many sub-companiesof corporations and groups have operated ineffectively and made big losses. As of December 31, 2018 the accumulated loss of Vicem Tam Diep Cement Company Limited was VND1,103 billion; Ha Bac Nitrogenous Fertilizer and Chemical Company Limited VND2,642 billion; DAP2-VinaChem Joint Stock Company VND1,836 billion; Quang Son Cement One Member Company Limited VND1,507 billion; and Rubber Trading & Tourism Service Joint Stock CompanyVND344 billion.

Some investments of corporations and groups in associated companies and other long-term investments have suffered losses. For example, the parent company - Vicem has one sub-company in dissolution process, and five associated companiessufferingaccumulated losses as of December 31, 2018 of VND766 billion.

The parent company,Vietnam Airlines Corporationwheninvesting in Saigon Post and Telecommunications Services Joint Stock Company, had an accumulated loss as of December 31, 2018of VND139 billion.

The parent company, Saigon Tourism Corporation (Saigontourist) has 10 associated companies with accumulated losses of VND231 billion and has long-term investments in five companies with accumulated losses of VND4,536 billion.

Vietnam Rubber Group (VRG) has 11 associated companies with accumulated losses of VND1,050 billion and has long-term investments in three companies with accumulated losses of VND134 billion.

Unserious management

In addition to listing a series of enterprises makinghuge losses and debts, the State Audit has pointed out that the management of costs andproduct prices in many enterprises is not strict, production and business norms have not been consistent with reality.

Regulations on salary distribution have not been issued, deduction of a salary fund is beyond regulations,the spending over the salary fund is approvedand compulsory insurance for employees have not yet been paid.

Some units still have large land areas which have not used or used for improper purposes, encroached upon, disputed, and have yet to fulfill their obligations to the budget.

Through audit, the State Audit identifies additional payable land rent and the land use tax (Vietnam Airports Corporation is VND63.88 billion; VNA is VND25.67 billion; Saigontourist is VND25.6 billion); Saigon Construction Corporation transfers the project formed in the future without the approval of Ho Chi Minh City People's Committee.

In addition, through the audit of projects using capital of groups and corporations showed that approved projects was not included in the list of zoning, regional and sectoral plans; submitted for approval for investment policies without review and appraisal, failing to meet requirements on investment necessity.

Many enterprises have large commercial loans while the debt to equity ratio is high, affecting corporate financial security.