The National Assembly (NA) has approved a resolution on improving and enhancing the implementation of policies in using State capital and assets in State-owned enterprises (SOEs) as well as the equitisation of those firms.
The resolution was approved by almost every deputy of the total 475 present in the last session of the 14th National Assembly Meeting, which ended on Friday.
According to NA Economic Committee chairman Vu Hong Thanh, SOEs have transformed their operations to focus on key industries in which private firms have not yet entered.
Despite their role as an essential driving factor for the Vietnamese economy, the NA resolution pointed out remaining issues inside SOEs regarding business policies, corporate governance and financial management.
“The State’s administrative management influences SOEs, leading to poor transparency in evaluating and selling State assets in said companies. This leads to underperformance of the companies,” the resolution stated.
The resolution also listed other issues with SOEs, such as inefficient investment in non-core industries and overseas projects, high State ownership in company charter capital, slow transformation of corporate governance models, limitations in drawing strategic partnerships, and violations in business valuation and assessment of land properties.
The NA report on using State capital and equitising SOEs showed there were 18 State-owned corporations and groups at the end of 2016 that had invested a total US$12.6 billion in 110 overseas projects and had spent $7 billion of the total registered capital. The projects were mostly in the telecommunications, gas exploration and exploitation, mining and rubber production indutries.
The National Assembly has asked the Government to provide detailed, specific plans to resolve the issues. For example, the Government should publish a set of standards to assess the performance of SOEs based on their sectors and operations by May 2019.
In addition, the NA asked the Government to transfer its ownership of SOEs to responsible agencies and completely resolve issues in those that violated regulations and caused losses in State capital and assets.
The Government should not use the State Budget to cover the losses that SOEs have procured, NA deputies said in the resolution, adding that individuals and groups must take accountability for violations, and these must be reported to the NA’s seventh session in May 2019.
NA deputies also asked the Government to tighten its supervision over the raising and use of capital in SOEs, especially those that have made foreign loans, those that have invested in domestic and overseas projects, and those that have been active in merger and acquisition deals, while it should also minimise its guarantees for these companies.
The Government must take closer watch over land and properties belonging to SOEs, and should evaluate their value to avoid losses during the equitisation process of the companies, the NA resolution said.
The Government should also perform stricter management and monitoring of post-equitisation land use in accordance with the firms’ equitisation plans. If the land and properties have been granted for different uses than the equitisation plan, they must be reclaimed and auctioned based on related regulations.
The inspection of land use changes from business purposes to housing purposes during the period of 2011-17 must be reported to the NA’s eighth session in October 2019, the resolution stated.
The NA resolution also required the Government to study a policy on management and use of income gained from selling State capital in SOEs so that said income can be accounted for in the State’s annual budget and mid-term financial and investment plans.
Any excess income must be reported to the NA for consideration.