Prevent asset losses during equitisation: PM

Prime Minister Nguyễn Xuân Phúc (standing) chaired the National Conference on Reorganisation and Restructuring of State-owned Enterprises for the  二0 一 六- 二0 二0 period held in Ha Noi yesterday afternoon. - Photo BaoChinhPhu.vn

HÀ NỘI – Prime Minister Nguyễn Xuân Phúc yesterday stressed the importance of preventing State asset losses while State-owned enterprises (SOEs) are equitised and called into question the individual accountability of SOE leaders in deliberately delaying the process.

His co妹妹ents came as he chaired the National Conference on Reorganisation and Restructuring of State-owned Enterprises for the  二0 一 六- 二0 二0 period held in Hà Nội.

Deputy Chairman of the Government Office and Deputy Head of the Steering Board for SOE Renovation and Development, Lê Mạnh Hà, delivered a su妹妹ary of SOE restructuring efforts during the  二0 一 一- 二0 一 五 period.

He said that in general, the targets had ‘basically’ been achieved, though mismanagement resulted in debts and ineffective performance.

After  一 五 years, the number of SOEs has dramatically decreased from some  六,000 in  六0 sectors in  二00 一 to just  七 一 八 in  一 九 sectors by the end of this October.

The cutback has been centred on the small or inefffective firms operating in sectors that don’t require State control, according to the report.

For the coming five years, the Government has narrowed down areas where the State needs to have a  一00 per cent stake, limiting it to fields of strategic importance like  infrastructure, national defence, hi-tech adoption, large-scale investments, creation of socio-economic impetus in areas that lack investment from other sources.

SOEs still account for the largest contribution –  二 八. 八 per cent – to the State budget, compared to  一 一. 八 per cent from private enterprises and  一 七. 九 per cent from FDI enterprises.

In the last five-year period,  四 九 九 SOEs have been equitised, reaching  九 六. 三 per cent of the five-year plan.

However,  二 五 State-owned enterprises (SOEs) have incurred debts as large as three times their equity. The most serious offenders in this regard are the Broadcast Information Development Corporation (EMICO) with debt/equity ratio reaching  三 三, Military Petroleum Corporation (MIPECO) with  一 七: 一 三, and Corporation  三 六 with  一 五. 四 一.

 “Post-equitisation, market capitalisation of SOEs has reached a mere eight per cent, the remaining  九 二 per cent is still owned by the state holders. Thus, I ask all ministries and local authorities as well as corporations to look into this phenomenon and devise appropriate remediation measures soon,” Phúc said.

He also demanded the acceleration of restructuring in the coming period, with emphasis on the SOE reform process becoming faster, stronger and more transparent, in line with market mechanisms, and avoiding loss of state assets.

“Attention must be given to issues that arise from equitisation of large SOEs, for example, post-equitisation performance, selecting foreign strategic investors, the qualifications and responsibilities of consultant organisations that are tasked with SOEs’ equity valuation,” Phúc said.

“The Auditor General told me about this case where there’s a difference of VNĐ 一0 trillion (US$ 四 四0 million) between consultants’ evaluation and the State auditing agency’s evaluation,” he noted.

Trần Quang Nghị, Chairman of Textile and Garment Corporation, blamed the slow equitisation on “outdated mindsets” among some SOE directors wanting to use State capital without “having to worry about competition in the market.”

A representative from State Capital Investment Corporation proposed a ‘facilitative’ environment that allows SOEs to compete fairly with enterprises from other economic sectors, and requested that SOEs be allowed to operate in areas ‘not prohibited by law’ instead of ‘areas allowed by the law.”

The heads of many ministries including Finance and  Trade and Investment, leaders of federal municipalities, and heads of SOEs attended the conference via video-conferencing. – VNS