For the first time, the Vietnamese government has directly tasked leaders of ministries and sectors to speed up the equitisation of state-owned enterprises.
EVN illustration photo
The government has unprecedently assigned specific tasks to the leaders of ministries and sectors who are members of the National Steering Committee for Enterprise Renovation and Development toward boosting state-owned enterprises (SOE) reform.
Accordingly, the government has ordered the Ministry of Finance to soon submit the budget and financial management schemes of PetroVietnam and Electricity of Vietnam (EVN).
Several years ago these giants were discovered to have numerous non-core investments in the property, insurance, banking and securities sectors. Their true finances are still a mystery.
The Government Inspectorate found that EVN had invested VND121.8 trillion ($5.8 billion) into non-core areas, massively exceeding the company’s chartered capital of only VND76.7 trillion ($3.7 billion). Of this, the group put as much as VND2 trillion ($95 million) into finance, banking, insurance and securities.
Similarly, the Ministry of Information and Communications has been required to submit Vietnam Posts and Telecommunications Group’s (VNPT) organisational and operational regulations. In early April the government approved a plan to equitise VNPT, under which leading telecom Mobifone will be separated from the parent company to become an independent operator.
Last year VNPT was reported by the Government Inspectorate to have violated regulations on the management and use of state capital and assets. It injected $157.1 million into 86 enterprises; 28 of those enterprises had a very low – 3.16 per cent – return on investment ratio. Another 20 enterprises and funds only broke-even or sustained losses.
The government has also tasked the Deputy Minister of Planning and Investment (MPI) Dang Huy Dong to, in this year’s second quarter, push the ministry to lay out the rights, responsibilities and obligations of state owners of SOEs and capital to be invested in them.
Currently, SOEs have a great deal of control of the sectors in which they operate. For example, EVN was the author of Vietnam’s power sector plans, from which it unsurprisingly benefits, reported the MPI.
Deputy Minister of Finance Tran Van Hieu is required by the government to submit a draft scheme on solutions to boost equitisation and withdrawal of state capital of SOEs within this month.
The MoF is also responsible for accelerating the financial restructuring of Shipbuilding Industry Corporation and Vietnam National Shipping Lines (Vinalines).
Vinalines was reported to have suffered losses of VND2.44 trillion ($116.2 million) in 2012, and around VND2.1 trillion ($100 million) in 2013.
The government has also tasked the leaders of the ministries of Agriculture and Rural Development, Labour, Invalids and Social Affairs, Home Affairs, Natural Resources and Environment, Justice, and the State Bank to speed up their respective SOEs.
At a February 2014 national conference on SOE equitisation for 2014-2015, Prime Minister Nguyen Tan Dug announced that 432 SOEs must be equitised in the period.
“Enterprise leaders that fail to boost equitisation or run enterprises ineffectively will be heavily punished or even fired,” he stressed.
By Khoi Nguyen
Đăng ký: VietNam News