Strong measures should be taken with individuals and organizations that delay equitization

Please tell us about the situation of SOE restructuring in the past time?

On 24th May, the Ministry of Finance sent a report to the National Assembly on the implementation of policies and measures to manage the use of state capital and equitize SOEs in the 2011-2016 period. Accordingly, Vietnam has equitized 570 enterprises, the total actual value of enterprises is 797 trillion VND, of which the state capital is 214 trillion VND. Total chartered capital of the approved plan is 223 trillion VND, of which the state capital is 141 trillion VND, accounting for 63%. Remaining 39 trillion VND for strategic shareholders; selling 4.4 trillion VND to employees; sold to the trade union 1,135 trillion VND and open auction 37 trillion VND.

Also in this period, the country withdrew 11.5 trillion VND, earning 11.1 trillion VND.

In 2017, 69 enterprises were equitized, according to the approved plan is the chartered capital of 161 trillion VND, of which the state holds 85.365 trillion VND. Capital withdrawal in 2017 at book value of VND 8.9 trillion, gaining 139 trillion VND, mainly from two big corporations namely Saigon Beer, Alcohol, Beverages Corporation (Sabeco) and Joint Stock Company Vietnam Milk (Vinamilk).

In the period of 2017-2020, the Prime Minister approved the national plan to equitize 127 enterprises. Specifically, there are 44 enterprises in 2017, 64 enterprises in 2018, 18 enterprises in 2019 and 1 in 2020. In 2017, 69 enterprises have implemented equitization, with 5 enterprises in the first 5 months of 2018.

Vinamilk is one of two large enterprises successfully equitized in 2017. Source: Internet.

It can be said that the pace of SOE restructuring has been slower than planned. So why, sir?

Actually, talking about mechanisms and policies for restructuring SOEs in the 2016-2020 period has been basically completed. For example, the Government issued Decree No. 126/2017/ND-CP on transfer of SOEs and one member limited liability companies with 100% charter capital owned by SOEs. The Ministry of Finance has also issued two circulars detailing the provisions of this Decree to provide legal basis for equitized enterprises.

Although policy mechanisms have been in place, implementation has been slow in progress for many reasons. The most basic reason is that at this stage, equitized firms are large corporations having almost tens of trillions VND of capital. In addition, according to the new regulations, equitized enterprises do not have to adjust the accounting books as before, forcing a business to process finance and prepare the land treatment before determining the value of enterprises. This process takes a lot of time. Of course, the business should also be more active.

At this point, in order to achieve the goal, what solutions are needed to be implemented?

Firstly, corporations and owners of equitized SOEs must actively accelerate their financial processing, formulate land use plans and carry out equitization steps in order to comply with the regulations.

In addition, if any problems arise in the course of implementation, the corporations and owners of the SOEs shall have to promptly report them to the competent authorities for timely handling or reporting to the Prime Minister for reviewing and disassembling.

Another important solution is that competent authorities should take administrative measures and strong measures against individuals and organizations so that equitization can be implemented on schedule.

Thank you Sir!