Equitization and divestment target is difficult to become true

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According to the Ministry of Finance, the progress of equitization, divestment, and restructuring of SOEs remains slow. Photo: ST

... “Sluggish” Deployment

Regarding the divestment situation, according to the latest report from the Ministry of Finance, as of November 24, 2023, state capital has been divested from 4 enterprises with a value of 8.8 billion VND, earning 19 billion VND; Groups, corporations, and state-owned enterprises have divested capital from 7 enterprises with a value of 53.5 billion VND, earning 206.3 billion VND.

According to a report sent to the Ministry of Finance on the implementation of the recent SOE restructuring project, the Committee for Management of State Capital at Enterprises said that in the first 10 months of 2023, the work of arrangement, innovation and restructuring, equitization, and divestment of state capital are being actively implemented, improving the operational efficiency of enterprises.

In particular, the State Capital Investment and Trading Corporation (SCIC) successfully sold capital in 7 enterprises collecting revenue reached 72 billion VND (of which, capital sale revenue at Binh Minh Plastc Joint Stock Company was 1.5 billion VND, which was not recorded in SCIC's revenue according to regulations), the capital sale difference reached 52 billion VND, revenue and capital sale difference reached 5% and 6% respectively compared to the year plan. In addition, the Committee also proposed that the Prime Minister and Deputy Prime Minister Le Minh Khai issue a document assigning the State Audit to audit the finalization value of the equitization of GENCO 3 Power Generation Corporation (EVNGENCO3); Directed Vietnam Oil and Gas Group (PVN) to implement PVN's divestment plan at Vietnam Public Commercial Joint Stock Bank (PVCombank)...

However, the equitization work is still very "sluggish". Also according to a report from the Ministry of Finance, in 11 months of 2023, no enterprise has had an equitization plan approved by the competent authority. While in 2022, only 1 additional SOE was equitized with a total enterprise value of 309 billion VND, of which the actual value of state capital was 278 billion VND.

What are main reasons?

The above results show the invisible goal of the equitization and divestment even though the Government has repeatedly directed to promote the arrangement, equitization, divestment and restructuring of SOEs.

Monthly reports from the Department of Corporate Finance (Ministry of Finance) often give explanations to the causes of slowness and failure arising during the planning and implementation process. In particular, the approval of the equitization plan, the slow divestment plan, the handling of financial problems, and the arrangement of housing and land facilities in accordance with the law on management and use of public assets are still dragging

​According to the Department of Enterprise Finance, the owner's representative agency (ministries and provincial People's Committees for SOEs assigned to manage) and the State Capital Management Committee at enterprises (for corporations and corporations) and the leadership of state-owned enterprises are in charge.

At the recent summary conference, leaders of the Committee for Management of State Capital at Enterprises also frankly admitted that restructuring, equitization, divestment, and rearrangement of houses and land at corporations is generally still slow compared to set requirements. In particular, there are a number of problems and difficulties in rearranging and handling houses and land such as local land planning, paperwork, land use rights disputes...; The number of real estate establishments is large and scattered across the country.

​Specifically, besides public assets, SOEs also own other types of assets are works attached to land, infrastructure, and production equipment. Meanwhile, the legality of these housing and land facilities are complex, leading to extended processing time, such as the land being managed and used but not yet allocated, leased, or granted by the State. Certificates of land use rights and land records and assets on land do not belong to the same enterprise; Some cases of management and use not for the intended purpose on the license...

Moreover, there are many subjective reasons, such as the awareness and implementation organization of some representative agencies of owners and heads of SOEs is still not high and not drastic; In recent times, inspection and examination work has not had any sanctions in considering and handling the responsibilities of heads of SOEs, owner representative agencies, and state management agencies in the slow implementation of equities. privatization and divestment of state capital in state-owned enterprises...

In the new year 2024, the work of divestment and equitization of SOEs needs to continue to be promoted. The Committee for Management of State Capital at Enterprises said it will continue to coordinate with management agencies to promptly synthesize and propose competent authorities to amend and supplement legal regulations related to operations. Production, business and investment, equitization, divestment of state capital, and rearrangement of houses and land of SOEs are still inadequate and unclear, have not been or are slowly being adjusted and supplemented, causing difficulties for businesses.

The Ministry of Finance also requests that ministries, branches, localities, corporations, and SOEs, according to their assigned functions and tasks, continue to promote preparations and complete necessary procedures for implementation of equatization and divestment work; Seriously implement the Government's instructions and the Prime Minister to speed up the implementation progress. The Ministry of Finance requires owner representative agencies to carefully evaluate to develop, plan, equitize and divest state capital in enterprises and organize implementation to ensure compliance, feasibility, ensuring no loss of State capital and assets, and at the same time recommending strict handling of cases of delay and violation of regulations on equitization and divestment of state capital in SOEs.