MoF to accelerate SOE equitisation

Hanoi (VNA) – The Ministry of Finance has planned to boost the equitisation of State-owned enterprises (SOEs) through rating the publicity and transparency of the enterprises’ financial statements, a finance ministry official said.

Deputy General Director of the ministry’s Corporate Finance Department Dang Quyet Tien said that his department is working with securities exchanges and other relevant agencies to be able to implement the plan this year.

Independent agencies and mass media would be also invited to take part in the rating to make it more transparent, Tien said.

He said that the plan is aimed at affirming that SOEs are also equal to other firms in the economy, besides making investors secure. It, therefore, would help accelerate the SOE equitisation process.

“If information is vague investors cannot be expected to feel secure,” Tien said.

He expected the new plan to create a leap in the country’s SOE restructuring.

The finance ministry made the move as a number of ministries and agencies still want to be dominant stakeholders of some their subsidiaries.

He gave the example of the Vietnam Machinery Installation Corporation (Lilama) - a subsidiary of the Ministry of Construction. The Ministry of Construction currently still holds 90 percent of Lilama’s stakes while some investors expected to have a higher ownership. Meanwhile, without reforms, especially in corporate governance, it would be difficult for Lilama to compete against foreign rivals the next time.

According to Tien, when investors pour their money into enterprises they would also like to make decisions related to the enterprises. Therefore, the opportunities to equitise the SOEs would be missed if the State still holds a majority stake in the enterprises.

The Ministry of Finance on Monday announced that 37 SOEs received approvals for their equitisation plans in the first five months this year, including Machines and Industrial Equipment Corporation, Vietnam Engine and Agricultural Machinery Corporation, Vietnam National Construction Consultants Corporation, and Corporation 36, in addition to the Vietnam Forest Corporation, and Vietnam General Corporation of Agricultural Materials.

The SOEs sold shares worth more than 2.08 trillion VND (92.85 million USD) in book value for 4.17 trillion VND in the period.

The State Capital Investment Corporation(SCIC)also offloaded its shares in a number of companies during the period, earning more than 2.8 trillion VND from a total book value of 985 billion VND.-VNA