Oversight key to SOE reform hinh anh 1At the workshop (Source: bnews.vn)
Hanoi (VNA) - Strengthening financial supervision of State-owned enterprises (SOEs) is key to improving their performance and enhancing the efficiency of State investments, experts said on November 29.

They told an international conference that this was particularly true in the context of the Government stepping up the SOE restructuring process.

The conference, organised in Hanoi by the Finance Ministries of Vietnam and China, discussed the problems and difficulties faced by financial supervisory agencies and shared international experiences on improving supervision mechanisms.

Vietnamese Deputy Minister of Finance, Nguyen Huu Chi, said that the financial supervision in SOEs in Vietnam is a complicated, difficult process because of the large number of SOEs with investments spread over various industries and different bodies representing State ownership in the enterprises.

As of early 2016, the Government has capital in more than 1,000 enterprises with total assets of 3.1 quadrillion VND (136.6 billion USD). Of these, the State holds 100 percent of capital in 781 enterprises.

Chi said the complications as well as inefficient operations were among the main factors behind the wastage and loss of State-owned assets and investments.

In 2014, pretax return on equity of State economic corporations and groups was 16 percent, and that of enterprises under the ministry and provincial-level People’s Committees was 10 percent.

Supervision of State capital in SOEs has improved in recent years with the Government issuing and updating a number of policies to improve the supervisory mechanisms in a bid to limit risks of State capital losses, the conference heard.

For State corporations and groups, the rights and responsibilities of the representatives of State ownership have been more clearly laid out.

Management and supervision are carried out in tandem with performance evaluation of firms through various actions including the audit of financial statements, evaluation and classification of enterprises, regular inspections and monitoring of corporate finance.

The Ministry of Finance, in co-ordination with other ministries and provincial authorities, has conducted annual reviews and assessments of financial status and performance of SOEs and reported to the Government.

The Ministry will also use its assessments to give risk alerts and recommendations.

Besides, the ministry has pointed out inadequacies and shortcomings in the current supervisory regime, including loose enforcement of regulations, overlap and dispersion in State management levels and lack of transparency in disclosures by firms, Chi said.

Wen Zongyu, deputy director of the Research Institute for Fiscal Science of China’s Ministry of Finance, said SOEs have been playing a key role in the country’s economic reforms and they were expanding.

He said Chinese SOEs were subject to public asset management, and had a tight relationship in the reform process, and the improvement of management mechanisms for State assets should be monitored in parallel with the SOE restructuring process.

The management system needs to focus on effective financial supervision, as well as timely issuance and enforcement of policies to promote innovation within the enterprises, according to Wen. – VNA