Equitisation of SOEs still sees slow progress

Only nine state-owned enterprises (SOEs) were given the green light from the government for their equitisation plans this year, reported the Ministry of Finance (MoF).

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A Vietnam National Shipping Lines (Vinalines) cargo ship (Photo: thuonggiaonline.vn)

The progress was still “very slow”, said Dang Quyet Tien, Director of the MoF's Corporate Finance Department, at the ministry’s press conference on the local financial and production situation and the restructuring and equitisation of SOEs in Hanoi on December 10.

Tien said though equitisation and divestment had a positive impact on the development of the stock market, improving the performance of firms, the slow progress was “concerning”.

Among nine SOEs reported, three were on the list of 128 SOEs required to be equitised by the Prime Minister Nguyen Xuan Phuc in the period from 2016 to 2020.

He said since 2016, Vietnam had 168 SOEs approved for equitisation, of which 36 were in the PM’s list.

According to the PM's plan, only 28 percent was met. By the end of 2020, 92 other SOEs should be equitised.

At the press conference, the MoF’s report showed the divestment in SOEs since 2016 was also slow. Up to now, state divestment only reached 8.9 trillion VND or 7.8 percent of the plan.

Tien told the Vietnam News Agency: “Some ministries, localities, and SOEs do not seriously implement the equitisation, divestment and restructuring plans.

“Many SOEs faced difficulties and need longer period dealing with financial, land and labour problems for their equitisation.”

The MoF also reported that there were 855 firms with State capital including 505 wholly State owned firms and 350 State-invested firms with the total state capital of 1,533 trillion VND.

The total assets of these SOEs in the fiscal year of 2018 reached 3,715 trillion VND, an increase of 2 percent compared to 2017. Among them, 110 firms or 13 percent reported losses.

Tien said the ministry will ask the PM to allow it to directly review and clarify responsibilities of SOEs that failed to equitise in time. Also, to help overcome difficulties for the local equitisation process, the MoF was amending some articles in Decree No. 126/2017 / ND-CP and Decree No. 32/2018 / ND-CP.

VNA