VietNamNet Bridge – While the government has forced state owned
economic groups to withdraw capital from other companies to gather their
strength on forte business fields, worries have been raised that the process
may go slowly because of the current regulations.
State owned conglomerates all
have shown their determination to withdraw capital from other business fields,
especially finance and securities, to focus on their main business fields.
Vinachem, a chemicals
manufacturer, for example, has sent a dispatch to its subsidiaries, telling
them not to make investment in non-core business fields and withdraw the
distributed capital from other companies as soon as possible.
The big corporation plans to
withdraw all of its capital from the Vietnam Trade and Industry Securities
Company, Bao Minh insurance and Vinachem finance company.
However, analysts have warned
that the state owned conglomerates have just made a vain business, saying that
the capital withdrawal process would meet big obstacles due to the currently
applied mechanism.
Deputy General Director of the
Electricity of Vietnam EVN Dinh Quang Tri also said EVN has kicked off the plan
to withdraw capital, but no progress has been made.
Under the current regulations,
the state’s capital to be put for sale must not be lower than the value in
books. Meanwhile, the stock prices have been decreasing dramatically, which
makes it nearly impossible to find the buyers who accept to buy shares at high
prices.
“Some investors want to buy
the capital contributed by EVN to other enterprises. However, they only accept
the prices which were lower than the capital invested before by EVN. Therefore,
we still cannot transfer our stakes,” Tri said.
A businessman, who asks to be
anonymous, has also commented that no state owned enterprise (SOE) manager
would dare to sell stakes at this moment to take back capital, because the
stocks are now dirt cheap.
“Selling stocks right now
means that SOEs would incur loss with the financial investment deals, which
means that they violate the current regulations on financial management,” he
said.
“SOEs’ managers themselves do
not want to sell stakes now, because they fear they would have to take
responsibility for the sales,” he continued. “If the managers sell stocks today
at low prices, and the prices unexpectedly increase sharply tomorrow, they
would be disciplined for the loss of state’s assets.”
As such, the “supreme
principle” in the SOEs’ financial management mechanism is that it’s necessary
to ensure that the state’s capital can be preserved in all cases.
However, economists have
pointed out that the principle proves to be unreasonable in a market economy.
All investment deals bear risks, and it would be a quite normal thing if the
State has to sell stakes at a loss.
Former Minister of Trade
Truong Dinh Tuyen, who was once the Secretary of the Nghe An provincial
Communist Party’s Committee, recalled that the same situation was seen in Nghe
An.
“The enterprise incurred big
losses. Therefore, I decided to sell it at a loss of 22 billion dong,” Tuyen recalled
one of the cases.
“This was a right decision. If
it had not been sold immediately, the State would have incurred even biggest
loss, or would have lost all of its capital. Meanwhile, the enterprise, after
the ownership transfer, has been profitable,” he concluded.
In fact, the phrase of
“preserving state’s capital” has been interpreted in different ways. “When the
stock market gets bustling, an SOE makes profit when selling stakes at 13-14
dong, higher than the purchase price at 11 dong. Does this mean that the
capital is preserved in this case?” questioned Deputy Minister of Finance Tran
Van Hieu.
“Vice versa, the SOE can sell
stakes for 8 dong only. Does this mean that the SOE has lost the state’s
capital?” he continued.
Source: TBKTVN
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