Reforming corporate finance policies

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The conference to disseminate policies and laws on corporate finance in 2022.

Reforming the method of managing state capital invested in enterprises

Deputy Director of the Department of Corporate Finance Mr. Pham Van Duc said the conference aims to disseminate issued policies and laws on corporate finance to help ministries, sectors and localities, State enterprises strictly and fully comply with the provisions of the law.

At the conference, the representative of the leaders of the Corporate Finance Department introduced a number of contents on the orientation to amend the Law on management and use of state capital invested in production and business in enterprises (Law 69/2014/QH13); the implementation of the project "Restructuring SOEs, focusing on economic groups and corporations for the 2021 – 2025 period". In addition, the conference also disseminated the basic contents of decrees and circulars related to state capital investment in enterprises.

Regarding the orientation to amend Law 69/2014/QH13, Mr. Duc said that the Committee on Laws of the National Assembly has reviewed the Government's proposal on putting the Law on Investment Management and Use of State Capital in production and business at enterprises (amended) in the program of law and ordinance making in 2023.

Regarding the goal of amending policies on the management of state capital invested in enterprises, Mr. Duc said one of the important goals is to reform the method of managing state capital invested in enterprises in accordance with international practices; and to reform the mechanism of evaluating the performance of SOEs according to the overall objective.

Mr. Pham Van Duc, Deputy Director of the Corporate Finance Department speaks at the conference.

The comprehensive amendment and promulgation of this Law will help perfect the institution and stabilize the legal environment for state capital investment in production and business in enterprises; create a sufficient and stable legal environment for the management and use of state capital and assets at state agencies and enterprises; ensure SOEs operate according to the market mechanism in business lines and industries at the request of the State.

Regarding the scope of regulation, the draft Law stipulates the investment and management of state capital invested in enterprises in which 100% of charter capital is owned by the State, enterprises in which more than 50% of charter capital is owned by the State; restructures state capital in enterprises; provides for rights and responsibilities of the owner's representative.

For example, for enterprises in which 100% charter capital is held by the State, the draft Law will clearly stipulate that F1 enterprises are not allowed to lend to F2 enterprises, the Board of Directors, the Chairman of the Board of Directors shall decide and take responsibility for the efficiency of capital mobilization, and debt repayment for mobilized capital (establishing a self-borrowing, self-paying, and self-responsibility mechanism in the enterprise's capital borrowing activities).

The progress of development and approval of the project on SOEs restructuring has not met the requirements

The Project "Restructuring SOEs, focusing on economic groups and corporations for the 2021 – 2025 period", aims to complete the rearrangement and transformation of SOEs ownership; ensure revenue from SOEs restructuring to remit to the state budget for the 2021 - 2025 period at least VND248 billion according to the Resolution of the National Assembly.

In addition, the weaknesses, losses, projects, works behind schedule, inefficient investment, and prolonged losses of economic groups, state corporations and SOEs must be settled; the project on the restructuring of all economic groups, state corporations, SOEs for the 2021 - 2025 period must be approved.

Speaking about the implementation of the Project "Restructuring SOEs, focusing on economic groups and corporations for the 2021 – 2025 period", Deputy Director of the Corporate Finance Department said that until July 22, 2022, the Corporate Finance Department had only received reports from a number of representative agencies on the construction and approval of the restructuring project, in which some reports have not yet met the prescribed time.

Basically, the progress of building and submitting to competent authorities for approval of the restructuring project has not met the requirements in Resolution 68/NQ-CP dated May 12, 2022 of the Government.

At the conference, representatives of some enterprises also raised problems in the process of equitization and divestment, such as the problem of determining the value of land upon equitization, determining the brand value of enterprises; problems in signing land lease contracts when transform from limited company to joint stock company, information announcement of enterprises and the raising of charter capital at enterprises

The questions raised at the conference were answered and noted by the leader of the Corporate Finance Department to continue to improve laws and policies on corporate finance.