SOEs equitisation must be more substantive: expert

The equitisation of State-owned enterprises (SOEs) needs to be made in a substantive and comprehensive manner, and all violations, especially at big loss-making firms, must been strictly handled, an official has said.


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The remark was made by Tran Tien Cuong, who led a Central Institute for Economic Management (CIEM) group in compiling a report on accelerating SOEs restructuring in 2016-2020.

He added the Government also needs to overhaul mechanisms and regulations on the rights and obligations of relevant parties during the restructuring process, especially equitisation.

CIEM said in the report that SOEs restructuring is still sluggish and low quality.

From 2016 to May 2017, 65 SOEs and five public service institutions were equitised. Thirty-eight SOEs had their value publicised but their equitisation plans haven’t been approved. Meanwhile, the value of another 107 firms is being verified.

The report attributed the slow equitisation to the unchanged policy on the sale of SOEs’ shares, adding that many regulations are not practical, making equitisation unattractive to investors.

According to CIEM, while eight SOEs announced bankruptcy from 2011 to 2015, only one went bankrupt from 2016 until now. The institute considers this number minuscule compared to how many loss-making SOEs need bankruptcy.

Both creditors and employees not wanting bankruptcy is the main reason for the firms staying afloat, said Pham Duc Trung – head of CIEM’s reform and development board.

Additionally, persons held responsible for loss-making projects and poor-performing firms have yet to be clarified. Other causes include shortcomings in financial and budgetary discipline and incomplete corporate governance frameworks.

Cronyism and interest groups have also been recognised as factors hampering SOEs restructuring.

CIEM Director Nguyen Dinh Cung  said it is necessary to existing State assets more efficiently, including SOEs, instead of extracting more crude oil and coal or exporting more minerals to boost growth. 

A one percentage point improvement in asset management would generate about 3-4 billion USD in return, and could push the growth rate of all SOEs up to 7 to 8 percent per annum, he noted.

Some experts said the list of State-invested assets should be immediately restructured to recover as much State capital from equitisation as possible.

Deputy Minister of Planning and Investment Dang Huy Dong urged the enhancement of SOEs management and supervision, the transparency of SOE-related information and the inspection of SOEs’ activities.

Responsibility of leaders of ministries, sectors, localities and SOEs must also be increased. Business leaders who fail to effectively carry out restructuring must be stringently punished, he added.

VNA



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