July 19, 2019 05:00

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The idea of waiting, hesitating in equitization still exists

19:49 | 09/04/2019

VCN - Recently, management agencies have made great efforts to research, amend and supplement policies and mechanisms towards improving publicity and transparency, as well as removing difficulties and problems in equitization, divestment of state capital and capital of state-owned enterprises. However, this process has been too slow compared to the plan. The Customs newspaper spoke with Mr. Dang Quyet Tien (pictured), Director of the Ministry of Finance’s Corporate Finance Department to clarify the issues.

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Could you please give your assessment on the process of equitization and state divestment in enterprises?

According to the plan, in 2018, 64 enterprises were to be equitized, but in fact only 23 enterprises had equitization plans approved by the competent authorities, with a total value of 31,706 billion VND, in which the state capital value was 16,739 billion VND. In 2018, there were 28 enterprises selling their shares for the first time with a value of 13,950 billion VND, collecting 21,827 billion VND. However, according to the assessment, the progress of equitization in 2018 was still slow and did not meet the plan. Many units have a large number of enterprises to implement equitization, but they were not implemented according to the plan and have not reported to the competent authorities to adjust the progress of implementation.

Meanwhile, the equitization plan for 2019 comprises 18 enterprises and more than 40 uncompleted ones from 2018. Since the beginning of the year, no enterprise has been approved for equitization. Without drastic measures, the plan will not be completed this year.

Similar to the divestment issue, according to the Prime Minister's Decision, in 2018, divestments were to be conducted at 181 enterprises. However, in fact, in 2018, divestment was carried out at just 54 enterprises according to the above Decision. In the early months of 2019, there were no enterprises in the list of divestments. Such progress of state divestment is slow and has not met the plan. Some ministries, branches and localities that have many enterprises carrying out divestments are still implementing this task but the results have been poor or they have not yet achieved any results. However, these units have not yet reported to the competent authorities to adjust the implementation progress.

The policy mechanism for equitization and divestment in recent years has been regularly improved by the Ministry of Finance, in addition to efforts to remove problems for each unit and each project. So why is the process of equitization and divestment still so slow?

First of all, it is undeniable that there are many objective problems that have existed for a long time, leading to the slow progress. That is because enterprises that must be equitized are large and manage many state assets. Or there are businesses that are in trouble because they need to handle some problems. For example, MobiFone must finish the AVG case before conducting equitization. It cannot equitize when the case has not been thoroughly dealt with.

However, according to us, the basic reason is due to the implementation process of the heads of ministries, branches and localities, as well as enterprises, especially in approving the plan of land use and price to calculate enterprise value. For example, the case of Vietnam Bank for Agriculture and Rural Development (Agribank). After more than one year of implementation the land use plan has not been completed.

Through review, we have found that this is being implemented very slowly in localities. According to the Land Law, local authorities are responsible for responding to enterprises within 30 days. However, in fact, there are projects that take months, even 6-9 months, but are still not finished. That leads enterprises to adjust their equitization progress and drag the progress of equitization in general.

Another reason is that many businesses do not anticipate their scale on land and property management, leading to the fact that they “think” it will be solved fast, but when it is started, they found it complicated, which makes the process of equitization impossible.

In the divestment, many units still do not have full records, have not established their land use right, so they cannot implement the divestment. Some businesses are also somewhat embarrassed in the process of divestment, especially the ones with loss-making projects. For example, Phuong Nam Pulp Mill (Vietnam Paper Corporation) has auctioned 3-4 times but no investors have bought it. Or Vietnam Steel Corporation wanted to divest from Thai Nguyen Iron and Steel Joint Stock Company but it can only be sold after dealing with legal disputes and clarifying mistakes. However, these are problems that cannot be resolved in a short time. There are businesses that investors are not interested in, do not want to buy, or there are businesses that can be sold but they are in trouble.

Besides the issues mentioned above, is there any other reason for the stagnation?

We believe that the fierce spirit of business leaders is not high, there is still the thought of waiting and hesitating in equitization. That is because when equitizing, the entire financial situation, all the liabilities associated with the responsibility of the business leader will be made public and transparent. Therefore, many business leaders who are about to leave are planning to conduct the equitization after they leave.

Another problem is the monitoring and supervision work. In 2018, we found that, if there were agencies to inspect and examine the discipline and administrative discipline on equitization or settlement of equitization or listing equitization in the market, the progress would be pushed faster. Thus, it is clear that there must be deterrence and also inspections to detect and handle violations.

How can we solve the issues and make sure the equitization and divestment plan meets the targets in 2020?

We think that now we know the disease – it is a problem in the land stage – so we will focus on directing and correcting the approval of the post-equitization land use plan and speeding up the implementation of this plan in a timely manner.

All the heads, leaders of ministries, branches and localities, State Capital Management Committees at enterprises must be responsible for urging and implementing equitization and divestment in accordance with the Prime Minister's decisions.

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In addition, it is necessary to strengthen inspection, supervision and transparency of cases which are implemented slowly or not implemented intentionally. We have talked about this issue many times already, those who do not implement, do not complete the task will be dealt with. Recently, the Prime Minister has issued a Directive to strengthen supervision and publicity of information so that in the future, businesses that implement the task slowly must also be known by the public. Conducting these solutions, we will promote the equitization progress and ensure equitization in accordance with the law and market principles.

Thank you, sir!

By Hong Van (record)/ Ha Thanh