State-owned firms’ serious state budget violations have driven a bus
through the government’s financial management.
According to a State Audit of
Vietnam (SAV) report on state budget usage in 2010, nearly all of 27 audited
state-run corporations and groups (CGs) failed to sufficiently contribute to
the state coffers in 2010. They were asked by SAV to pay back about $390.57
million to the state budget.
The report, which was released
last week, said the two CGs Electricity of Vietnam and Vietnam Waterway
Construction Corporation suffered from big losses of about $403.84 million and
$3.53 million, respectively.
Deputy State Auditor General Le
Minh Khai pointed out CGs’ lax financial management with a debt to equity ratio
of 50.88 per cent for Truong Son Construction Corporation, 37.58 per cent for
Vietnam Waterway Construction Corporation, 31.13 per cent for Agriculture and
Irrigation Mechanisation and Electrification Corporation and 24.37 per cent for
Transport Engineering Design Incorporated.
“These companies have big overdue
debts and their inventories have been calculated inaccurately,” Khai said.
Most audited CGs were found to
have inefficient non-core investment activities. For instance, Vinalines’
non-core investment amounted to $32.3 million, equivalent to 10.37 per cent of
its charter capital, Vinacomin $88 million - 12.09 per cent, EVN $218.7 million
- 4.13 per cent and VICEM $30.5 million - 5.27 per cent.
The non-core investment, especially
in finance, banking, securities, insurance and property, has induced big
losses. For instance, EVN made a loss of around $48 million due to its
inefficient telecommunications investment. In another case, securities
investments left Saigon Beer, Alcohol and Beverage Corporation (Sabeco) out of
pocket by $17.2 million.
The report said operations of 11
out of 21 CGs mainly relied on borrowing. For instance, the debt to equity
ratio for Truong Son Construction Corporation was 9.19 times, Infrastructure
Development and Construction Corporation (4.79), Agriculture and Irrigation
Mechanisation and Electrification Corporation (4.39), EVN (3.83) and Vinalines
(3.12).
Meanwhile, under Decree 09 dated
February 5, 2009, specifying the financial management of state-owned
enterprises (SOEs), the acceptable debt to equity ratio of an SOE is three.
“These figures show that many CGs are playing ducks and drakes with the state’s
money. Meanwhile, the government’s financial management over them remains too
lax,” said Nguyen Dinh Cung, vice head of the Central Institute for Economic
Management (CIEM).
“While using the state budget
inefficiently, SOEs are largely responsible for the 72 per cent increase in the
consumer price index during 2008-2011, seriously affecting the livelihoods of
many people,” said Vu Thanh Tu Anh, director of research at the Fulbright
Economics Teaching Programme in Ho Chi Minh City.
Thanh Thu | vir.com.vn
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