Prime Minister directs the enhancement of SOEs restructure and renewal

	Terminate ineffective SOEs and ineffective investment projects
	Resolutely handle the large SOEs
	The process of SOEs’ equitization is slow and not substantive

Enhancing the SOEs restructure and renewal. Photo: Internet

Accordingly, to enhance SOEs restructure and renewal for 2016-2020, the Prime Minister instructed ministries, ministerial-level agencies, Government agencies, People's Committees of provinces and cities directly under the Central Government, economic groups, and State corporations to focus on implementing tasks effectively.

About perfecting mechanisms and policies, the Prime Minister assigned the Ministry of Finance in the first quarter of 2017 to submit to the Government a Decree replacing Decrees: 59/2011/ND-CP, 189/2013/ND-CP, and 116/2015/ND-CP on transformation of enterprises with 100% state capital into joint-stock companies. In particular, it will provide improvement of quality and responsibility of consulting restructures identifying State capital and assets in enterprises to be equitized and withdrawn State capital; the hire of international consultants to evaluate the Enterprise’s value and sell State shares in the enterprises in the global market; and the mechanisms to attract strategic investors and supplement criteria associated with responsibility and sanctions to ensure implementation of commitments for strategic shareholders; and the research and establishment of regulations on land lease at the locations which have business advantage in order to improve the efficiency of land use and increase revenues for the State budget.

In the second quarter of 2017, the Ministry of Finance will submit to the Government a Decree amending and supplementing Government Decree 91/2015/ND-CP on State capital investment in enterprises and management, use of capital and assets in enterprises in accordance with the Law on management and use of State capital for investment, production and business in enterprises and in accordance with the direction of further expanding other capital divestment methods such as: conventional auctions or sellingthe whole State capital in a public listed company, but not less than the trading price range at the selling time; and adding provisions on the determination of the starting price for State capital before sale in accordance with matched transaction methodon the Stock Exchange.

The Ministry of Planning and Investment will submit to the Government a Scheme establishing a specialized agency as an owner’s representative for SOEs and State capital in enterprises in February, 2017; and submit to competent authorities to promulgate criteria for classification of public service units and the list of public service units of ministries, branches, localities, economic groups, State corporations to be transformed into joint stock companies in the first quarter of2017; and study and submit to competent authorities to promulgate a system assessing the efficiency of production and business operations and public tasks implementation of enterprises in the second quarter of 2017.

In the second quarter of 2017, Ministries and related branches will submit to the Government amending and supplementing the provisions relating to the restructure and operation of SOEs in line with the newly issued laws (Enterprises Law, Investment Law, Law on Management and Use of State CapitalLaw on Management and Use of State Capital Invested in Production and Business at Enterprises)and proposed practical requirements.

Building strategy for business operations for each enterprise

The Prime Minister asked ministries, branches, localities, economic groups and State corporations to continue to thoroughly learn and effectively implement the Resolutions of the Party, conclusions of the Central Government and Politburo, and Resolutions of the National Assembly as well as Directions of the Government and the Prime Minister. Identifying SOEs restructure, renewal and equitization as a key political task in the annual and five- year socio-economic development of each level, branch, locality and SOE; and issuing specific action plans for implementation.

In the first quarter of 2017, according to Decision 58/2016/QD-TTg on the criteria for classification of SOEs and enterprises with State capital, building a list of SOEs implementing the restructure and equitization for each year (2017- 2020), including a roadmap determining the enterprise value for each enterprise implementing equitization to submit to the Prime Minister for approval; and implementing periodic review and adjustment and supplementation.

The ministries, branches, localities, economic groups and State corporations will issue appropriate mechanisms to attract capable strategic investors and reduce State ownership to a level sufficient to change the enterprise administration; build business strategies for each enterprise; and research and determine the brand value into enterprise’s value upon equitization.

Also, directing enterprises under their management to implement in line with the plan and progress of restructure, renewal, equitization and State capital divestment approved by the competent authorities to ensure the maximum benefits for the State and pay in time all revenues on the Enterprise Arrangement and Development Fund as per regulation. The equitized SOEs must register transaction and list on the Stock Exchange when meeting full requirements within one year from the date of first issue of shares to the public.

Enhancing examination, investigation, supervision and audit to avoid the loss of State capital and assets while arrangement, equitization and capital divestment; resolutely handling loss-making enterprises, ineffective investment projects or low-efficiency projects under the market mechanism; releasing control mechanism matching with the selling, purchasing and integration capital of the enterprise; and carrying out publicly, transparently and in line with the Law on investment, financial administration, sales, income distribution, staffing, equitization and capital divestment; and directing the implementation of policies for employers and workers in the SOEs carrying out the arrangement and renewal, including Enterprise managers and CEOs.

Directing the application of enterprise administration principals under International rules; completing internal control and audit mechanisms, strictly performing financial monitoring, assessing the operation efficiency and publicizing the financial information; issuing a mechanism to connect the recruitment, appointment, dismissal and reward for enterprise’s leaders and employers with production and business results.

Strictly handling SOEs leaders performing ineffectively

The Prime Minister asked ministries, branches, localities, economic groups and State corporations to consolidate a management apparatus, particularly to consolidate immediately the management apparatus and State capital representatives at loss-making enterprises and ineffective enterprises; strengthen the training for enterprise management staff; assigning qualified staff to meet the requirements and enhancing the capacity, powers and responsibilities of internal supervisors and auditors.

Identifying personal responsibility in implementing arrangements, equitization and State capital divestment in enterprises. The ministers, chairmen of provinces and cities directly under the Central Government, presidents of Member Boards of economic groups take administrative responsibilities under the Prime Minister and strictly handle SOEs leaders and State capital representatives who do not implement strictly or implement ineffectively the arrangements, equitization and State capital divestment in enterprises and assigned tasks in enterprise management and operation; and individuals who wrongly implement regulations and purposes or implement ineffectively causing losses of State capital and assets must pay compensation and take all responsibility under the law.

The Ministries: Finance, Planning and Investment, Labour- Invalids and Social Affairs, Home Affairs, Justice, State Bank of Vietnam and the Steering Committee for Enterprise Renewal and Development should closely coordinate with the Ministries, branches, localities, economic groups and State corporations in directing, inspecting, urging and guiding, solving difficulties and handling obstacles in the process of implementation of the SOEs arrangement and renewal plan for 2016 - 2020 and plan approved by the Prime Minister on arrangement, renewal, development and improvement of efficiency of agricultural and forestry companies.

Chairpersons of the member Boards company presidents, CEOs, directors of economic groups or State corporations, SOEs and representatives of the State capital at enterprises build plan and develop a roadmap to organize the implementation of SOEs arrangements and renewal in accordance with the plan approved by the competent authorities. Reporting quarterly and annually on the implementation to the Ministry of Finance and the Steering Committee for Enterprise Renewal and Development (the quarterly report is to be made before the 10th of the next quarter and the annual report is to be made before February of the following year) and reporting to the competent authorities on obstacles and difficulties arising upon implementation. The reports should show clearly the status of implementation, performance, advantages, disadvantages, problems and recommendations, if any. The Ministry of Finance shall summarize and quarterly and annually report to the Prime Minister.

Continual reviews to impute responsibilities to leaders of SOEs causing State capital losses VCN - At the conference on privatization and divestment in SOEs in the afternoon of 23-122016, media representatives ...

The Steering Committee for Enterprise Renewal and Development monitors, directs and quarterly and annually reports to the Prime Minister on the implementation of this Directive; coordinates with relevant agencies, discovers unexpected problems, urgencies arising to promptly report to the Prime Minister for consideration and decision.