Minister Dinh Tien Dung: There are no legal loopholes in State capital management

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Minister Dinh Tien Dung explained to the National Assembly on the afternoon of 28 May 2018.

Associated with economic integration

Regarding the results of monitoring legal document issue, the Minister of Finance expressed his agreement with the report of the supervision delegation. In terms of shortcomings, the report showed that some policies and guidelines had been slow to be institutionalized, but the report also fully showed the construction situation and legal documents on management of state capital and assets in enterprises and equitization of State-owned enterprises. At any stage, there are legal documents at various levels such as laws, resolutions of the National Assembly, decrees of the Government, decisions of the Prime Minister, and Circulars of ministries and branches to regulate the management in the use of State capital and assets in enterprises and equitization of State-owned enterprises. Therefore, there are no legal loopholes for management, use of State capital and equitization of State-owned enterprises. At the same time, the Finance Ministry shall continue reviewing and perfecting the legal system, ensuring the full and uniform Law on management and use of State capital and assets in enterprises and equitization of State-owned enterprises.

It can be said that in the field of management, use of State capital in enterprises and State-owned enterprises have complex contents. Along with the innovation of the economy and the practical operation of enterprises in the market economy, it requires updating and renovation in each period to suit the development orientation of the Party.

With the realities of the economy and operation businesses, Minister Dinh Tien Dung said that the timely updating of renovation policy, perfecting the policy mechanism associated with the innovation, integration of the economy to overcome limitations was necessary.

Some problems in equitization for 2011 - 2016 included in the monitoring report such as the equitization time, valuation of the enterprises, determination of the starting price of the offering were issued in Decree No. 126, effective from 1 January 2018.

On the causes of shortcomings, the Minister of Finance added that the regulations on administrative discipline and handling of violations were not strong enough to comply with regulations on management and use of State capital and assets in State-owned enterprises and equitization of State-owned enterprises in recent times.

Accurately determine the role of State-owned enterprises

As for the results of monitoring the implementation of legal policies on the management of the use of State capital and assets, the Head of the financial sector reported a number of shortcomings. Accordingly, the performance of State-owned enterprises for 2011-2016 should be closely linked to the global economic downturn which seriously affects our economy in the context of deepening integration. At the same time, it must be associated with the process of equitization of State capital and evaluation in the context of State-owned enterprises' reform and restructuring.

The organizational structure of State-owned enterprises is formed by the parent company and subsidiaries, in which the majority of the companies are joint-stock companies. When evaluating the effect of the enterprise on the scale of turnover, the asset size must exclude part or the whole of the turnover of the assets of the subsidiaries and affiliated companies according to the regulations in the financial accounting Law.

On the other hand, State-owned enterprises are the main areas of social security, providing public-utility services in disadvantaged areas.

"It also needs the reconsideration of enterprises implementing social security because the business efficiency is not high, which also affects the reduction of general profit targets when assessing the effectiveness of State-owned enterprises. Therefore, the assessment of the effectiveness of State-owned enterprises needs to pay attention to this feature to ensure accurate reflection of the scale of State-owned enterprises' role", said Mr. Dinh Tien Dung.

The report of the supervision delegation mentioned some violations in the implementation of legal policies on the management and use of State capital and assets in enterprises, causing serious and long-lasting financial difficulties. Violations show that the focus is mainly on the organization, and is the main cause of deliberate violations of regulations on management of the use of state capital in enterprises, and directly relates to the responsibility of some leading members in State-owned enterprises.

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Obviously, not all State-owned enterprises violate regulations. The monitoring report has assessed that State-owned enterprises are an important tool to ensure the effective implementation of the macro-stabilization policy, curbing inflation in response to market movements; to create a large source of revenue for the State budget, to make important contributions to the building and development of socio-economic infrastructure and economic restructuring; to perform the task of national defense and social security policy.