Government to punish recalcitrant SOEs

A branch of the MB Securities Joint Stock Company in Hanoi (Photo: VNA)

Hanoi (VNS/VNA) – Leaders of qualified
State-owned enterprises (SOEs) will face demotions, salary cuts, fines and even
criminal charges if they fail or delay listing on the Unlisted Public Company
Market (UPCoM).

These are some of the drastic measures being
considered by the Ministry of Finance (MoF) and the Government Office (GO) as
part of efforts to speed up equitisation and induce more transparency into the

Deputy Prime Minister Vuong Dinh Hue has also
instructed the MoF and GO to investigate and hand out stiff punishments to
businesses and commercial banks that do not finalise the procedures despite
being qualified to list on the UPCoM.

The MoF will compile a list of equitised SOEs
where the State still retains 36 percent or more of its stake, as well as those
with zero to 36 percent of State capital, though the decision for the latter to
become listed is contingent on the company’s shareholders.

In the last six months of 2017, any enterprise
tardy about going public on the UPCoM will be heavily fined under Circular
36/2017/TT-BTC which has been in effect since June 15, 2017.

Companies failing to list or register 12 months
later than requested by the State Securities Commission of Vietnam will attract
fines of  300 million VND to 400 million VND (13,342 USD to 17,790 USD).

The MoF has also asked the Government and
responsible departments and localities to consider disciplinary action against
the leadership of companies that are dragging their feet on completing listing

The disciplinary actions would range from
demotions, transfers, salary cuts to more serious criminal charges.

The threat of severe action has prompted several
companies to hasten their listing procedures. Officials expect a spate of
companies being listed in the second half of the year.

In just five days (July 17- 21), 14 companies
have successfully listed their stocks on the HNX, UPCoM and the Ho Chi Minh
Stock Exchange (HOSE), with a total of more than 500 million shares.

[Equitisation of State-owned enterprises remains sluggish]

On July 20, the Binh Duong Water Environment
Joint Stock Company, with stock code BWE, listed 150 million shares on the HOSE
at the referential price of 14,300 VND per share (63 cents); while the Viet Thang
Corporation, stock code TVT, listed 21 million shares at 35,000 VND per share (1.55

Meanwhile, the PetroVietnam Power Corporation
(PV Power) is preparing its initial public offering (IPO) for late next month.
The Government is seeking strategic investors for the firm and planning to
decrease its holdings to below 50 percent. Around 45 percent of PV Power’s
total shares will go to the strategic investors, while three to four percent
will be reserved for the IPO.

The Deputy PM has ordered that all State-owned
commercial banks are listed on the UPCoM in order to improve transparency in
their operations and generate more opportunities to raise capital.

As of now, at least 10 banks with a total
charter capital of 95 trillion VND (4.2 billion USD) plan to be listed on the
UPCoM. Meanwhile, the Vietnam Prosperity Joint-Stock Commercial Bank, with a
chartered capital of 14.06 trillion VND (625 million USD), has registered to
list more than 1.33 billion shares on the HOSE.

In a document published last week, Deputy PM Hue
also demanded that a list of 730 equitised companies yet to be listed on the
UPCoM as of June 2017 be published on the Government’s online portal. – VNA

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