Speed up equitisation and divestment progress

The plan to equitize or sell strategic capital in 2020 missed the goal.

Divestment at Sabeco is a bright spot

Regarding the plan and the implementation of equitisation, the Department of Corporate Finance underthe Ministry of Finance said that the equitisation plan for the 2017 – 2020 period was 128 enterprises.

In the 2016 – 2020 period, there were 178 enterprises approved by competent authorities with their equitisation plans fora total value of VND443,503 billion, of which the value of state capital was VND207,116 billion.

However, out of the 178 equitised enterprises, only 37 of 128 equitized enterprises are in the equitised list in line with official dispatch No. 991/TTg-ĐMDN and the Prime Minister's Decision No. 26/2019/QD-TTg (reaching 28% of the plan).

In 2020, there are still 91 enterprises that have not completed equitisation.

Thus, the equitisation progress ofenterprises is still slow. The units that still have many enterprises on the list to be equitised in 2020 are Hanoi (13 enterprises), Ho Chi Minh City (38 enterprises), the State Capital Management Committee in Enterprises (six enterprises); Ministry of Industry and Trade (four enterprises); and Ministry of Construction (two enterprises).

Regarding divestment, in 2020, the whole country has withdrawn VND2,505.6 billion, collecting VND5,965.7 billion. The total divestment from 2016 to 2020 is VND27,275 billion, collecting VND177,037 billion. According to the Department of Corporate Finance, the bright spot in divestment in this period was the divestment of VND3,436 billion, collecting VND109,965 billion at Sabeco. The state divestment in Sabeco plays an important role in implementing the plan to collect and pay proceeds from equitisation. However, divestment under the Decision No. 1232/QD-TTg only reached 30% of enterprises and 11% of total value of capital to be divested.

Regarding the equitisation results, the Department of Corporate Finance said that in terms of salevalue, according to the approved plan, the total value expected to be sold to beneficiaries was VND98,748 billion, equivalent to 48% of the value of the state capital in enterprises.

However, the actual implementation of the sale of shares was not as successful as planned, the total actual value of the sale was VND22,748 billion, reaching 23% of the sale plan, equivalent to 11% of the value of state capital at enterprises.

However, the total value of the Enterprise Arrangement and Development Fund from equitisation is VND36,145 billion, equal to 1.6 times the selling price.

Regarding the causes, the Department of Corporate Finance said that a number of mechanisms and policies were issued, revised and completed in a stricter direction, ensuring full procedures, and legal basis, especially in the field of land when equitizing and divesting capital, therefore the review and approval of the land use of the enterprises implementing the equitisation must follow many processes and procedures, taking a lot of time.

At the same time, through the realization of rearrangement and handling of facilitiesand land, it shows that most corporations and state-owned enterprises do not actively implement state policies until equitisation is required, it will be implemented to rearrange and handle facilitiesand land, thereby affecting the progress.

In the implementation, the unit did not implement the set schedule on time; the review, amendment and supplementation of the list and the equitisation plan was slow. The construction and implementation of plans for the equitisation of state-owned enterprises and divestment have not been given attention.

Promptly provide detailed instructions on land use plans

Entering 2021, the equitisation and divestment progress is expected to be accelerated when the relevant mechanisms and policies have been completed, and the issued documents will help remove bottlenecks in the process of equitisation and divestment.

Accordingly, the Ministry of Finance submitted to the Government for promulgation a number of decrees, such as Decree No. 121/2020/ND-CP dated October 9, 2020 amending and supplementing the Clause 2, Article 12 of Decree No. 91/2015/ND-CP on investment of State capital in enterprises and management and use of capital and assets in enterprises; Decree No. 140/2020/ND-CP amending and supplementing a number of articles of Decree No. 126/2017/ND-CP, Decree No. 91/2015/ND-CP and Decree No. 32/2018/ND- CP with the amendment and supplementation of many new points, thereby removing legal problems and practical difficulties, especially problems related to the land handling mechanisms in equitisation.

According to economic expert Dang Dinh Dao, the recently issued Decree 140 is expected to remove the bottleneck on land handling that has delayed the equitisation of state-owned enterprises for a long time.

Mr. Dao said that, if the real estate settlement is not done well in the equitisation, the equitisation process of state-owned enterprises will easily turn into the privatization of state-owned enterprises, where state resources, especially land, will be lost.

According to Deputy Minister of Finance Huynh Quang Hai, the issuance of Decree No. 150/2020/ND-CP on converting public non-business units into joint-stock companies is an important legal basis for public service delivery units to be deployed in the future. Decree No. 150/2020/ND-CP has just been issued by the Government with many new points, clearly defining many important issues such as financial settlement, valuation and management that will remove problems for public non-business units in the transition.