Delays in the state-owned enterprise equitisation push is again under
the microscope.
Hanoi is yet to approve any
equitising plans of seven Hanoi businesses in the list of 93 businesses to be equitised
in 2012 aired by the Ministry of Finance in June, according to a Government
Office source.
In fact, when the list of 93
firms to be equitised in 2012 was declared, concerns over their progress were
voiced rooted in the fact that only six businesses wrapped up their
equitisation plans in 2011 and the first five months of 2012.
Vietnam National Textile Garment
Group is likely to drop its target to finalise its equitisation in 2012 despite
its early preparations and the leadership’s strong commitment, according to a
Ministry of Industry and Trade representative.
A sliding stock market, worsening
economy and investors’ finite financial sources were key reasons behind firms’
delayed equitisation path.
However, looking back on
enterprises’ equitisation process in the past five years it is apparent that
delay has seemingly becoming a ‘chronic disease’.
For instance, during 2007-2010
only 30 per cent out of 900 businesses bound to be equitised reached their
targets. One should remember that the stock market was still in good shape in
2007.
Besides, firms with over 51 per
cent state capital ratio still held a large proportion among equitised firms.
Experts involving in the draft
project on furthering enterprises reforms to boost operational efficiency which
was presided by the Ministry of Planning and Investment pointed out that the
efforts to restructure businesses in key sectors and areas have reported
limited results.
Of 1,039 enterprises with 100 per
cent state capital 29 per cent of them operate in
agriculture-forestry-fisheries areas, 19 per cent engage in industrial
production, 10 per cent in transport, 9 per cent in construction and up to 36
per cent work in trade, services and tourism areas which are believed do not
need to raise state capital.
Since a big share of state
capital was put in trading areas, it was impossible to say delay in equitising
enterprises in the past mainly stemmed from market difficulties.
The experts, however, attributed
the delay to problems relevant to policies and mechansism on enterprises
equitisation.
Irrespective of high bad debt
rates at existing enterprises which hinder firms’ equitising schemes, current
mechanism on setting enterprise value, particularly their stock starting price
is impractical as the price is often much higher than their actual value,
putting firms and relevant state management bodies in a fix as they fear of
causing losses to state coffers in the face of sliding stock market.
Second, guiding regulations to
define land use rights, setting advantage values and sourcing strategic
partners are not in place, making investors to turn to different state bodies
for permission, then delaying the process.
Third, cumbersome operations of
some state groups and corporations is a problem. There are cases state groups
and corporations are bound to equitise, but some of their member companies
operate in areas the state needs to take ruling.
“Mechanism-related impediments
need to be soon tacked on the basis of ensuring transparency and protecting
national interests to facilitate the process,” said head of Vietnam Institute
of Economics Dr. Tran Dinh Thien.
Bao Duy | vir.com.vn
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