Removing obstacles to transfer enterprises to SCIC

	Transport Ministry divests from 8 firms
	The Ministry of Finance proposes to the Government the sale of SCIC’s capital
	SCIC will not divest State-owned capital from Vinamilk this year

Concerning whether SCIC sells State capital for expenditureor not, Mr. Hoang Van Thu, Deputy Director of Corporate Finance Department (Ministry of Finance) said that, if the operational regulations of SCIC are not understood clearly, the confirmation on whether SCIC sells State capital for expenditure is really dangerous. The operational regulations of SCIC are stipulated by Government Decrees, including regulations on preservation of State capital when receiving, and SCIC only takes the remaining capital for investment. Therefore, selling State capital for expenditure is not an issue of concern.

Delay in transfer

According to the Central Institute for Economic Management (CIEM), the transfer of acting representatives of State capital owners of enterprises from Ministries, Provincial People’s Committees is an important measure in the restructure of State Owned Enterprises, and contributes to improve the management efficiency of State assets invested for production and business, investment environment improvement, and equal business and equality between models of enterprises. Thus, recently, the Prime Minister issued directions and requested SCIC and the ministries and provincial People’s Committees to unify the List of enterprises and implement the transfer of owner’s acting representatives. But in fact, the transfer has taken place slowly.

Mr. Nguyen Hong Hien, Deputy Director of SCIC acknowledged that although the Prime Minister urged the transfer of enterprises, the results were still low, especially from 2009 to now. The reason was that many ministers and provinces have not paid attention to and closely guided the transfer of acting representatives of State capital owners of enterprises to the SCIC.

Some ministries and provinces delayed the transfer or transferred a few enterprisesof the total number of enterprises subject to transfer. Besides, ministries andPeople’s Committees of provinces and cities delayed to approve settlement of State capital at the time when enterprises officially transferred into joint stock companies (2nd settlement of State capital); and delayed to handle financial exigencies before equitization, leading to insufficient conditions for capital transfer as described. Actually, according to Decree 59/2011/ND-CP (Decree 59) on transformation of enterprises with 100% State capital into joint-stock companies and point e in Article 5 of Resolution 40/2015/NQ-CP, the time for 2nd capital is 60 days from the date when the company officially transforms into a joint stock company.

However, ministries and provinces stated that the delay in transfer of enterprises to SCIC was caused by other reasons. Mr. Do Thai Hung, Enterprise Management Department (Ministry of Transport) said: "This will support enterprises to better manage State capital, but do enterprises want or not? Some enterprises do not want to move out of the ministries which manage their industries because these ministries clearly understand their enterprises and will create more favorable conditions on the market for them, so why should they change?

This is also the opinion of Ms. Nguyen ThiHoa, Deputy Director –Enterprise Innovation and Development Standing Board (the Ministry of Industry and Trade). In addition, on the actual implementation of the transfer, she shared difficulties for the equitization of enterprises before the transfer. For example, Vietnam Steel Corporation equitized from 2008, but after 9 years the Corporation has not implemented the account settlement during equitization. While this is a corporation which has many sub-units and lands, the Corporation has met many difficulties when implementing in accordance with Decision No. 09/2007/QD-TTg on the re-arrangement and the handling of house and land owned by the State.

“We sent a document to the Prime Minister to urge enterprises to implement account settlement during equitization 6 months ago, but till now, we have not received the direction of the Prime Minister on account settlement duringequitization”, Mrs. Hoa said.

Removing obstacles

From the above situation, the representative of the Ministry of Industry and Trade agreed with the information on amending Decree No. 59 towards handing over the original status. That means despite objective exigencies from production and business of enterprises, the SCIC still receives the transfer. Moreover, Mr. Hien proposed to amend and supplement some contents in Decree 59 and Circular 118/2014/TT-BTC in the directionof immediately transferring State Groups, Corporations and Enterprises which completed equitization and are subject to transfer to SCIC without waiting for approval for the 2nd capital settlement. After receiving, the SCIC will continue to collaborate with agencies to decide equitization and verify financial statements to submit to competent authorities for approval.

This is also a concern of the Ministry of Finance. In a recent conference relating to the transfer of enterprises to SCIC, Mr. Hoang Van Thu, Deputy of Corporate Finance Department (Ministry of Finance) acknowledged that currently, Decree 151/2013/ND-CP and Circular 118 of the Ministry of Finance detailed the subjects and process of enterprises transfer to SCIC.

During the transfer process, there were some local situations reflected to the Prime Minister. After the Government issued a Decree amending Decree 151, the Ministry of Finance will draft a circular replacing Circular 118 in the direction of speeding up the transfer, including measures ontechnique and process.

As the host unit, we are pleased to listenthe opinions of the ministries and provinces about technical problems and process to be amended in Circular 118," Mr. Thu said. In fact, according to Circular 118, for technicalaspects, the agencies are required to complete the capital settlement at the time of business and production, the transfer is just implemented. Through actual implementation of equitization and capital settlement of enterprises, ministries and agencies are very slow due to handling financial problems. This is also one of the contents in the draft decree replacing Decree 151.

SCIC is the acting representative of the State capital owner VCN- The Prime Minister has directed the transfer of the acting representative of the State capital owner ...

Talking about amending Decree 151, Mr. Thu added, based on proposals of provinces and directions of the Prime Minister, the Ministry of Finance added some contents in the draft decree replacing Decree 151, in which the highlight is adding 2 more subjects out of the transferred subjects, which are local lottery enterprises and agroforestry enterprises. These units affect socio-economic stability as well as land arrangement in provinces. The public enterprises which have revenues with a proportion of over 50% in 3 consecutive years will be maintained to ensure socio-economic stability for provinces.