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Vietnam to retain full ownership in SOEs in 11 sectors

Xinhua, January 4, 2017 Adjust font size:

The Vietnamese government has issued a directive to retain full ownership in state-owned enterprises (SOEs) operating in 11 sectors concerning the country's political, economic and military vitals, the Vietnam Economic Times reported on Wednesday.

The 11 sectors include military mapping and measurement, industrial explosive material production and trading, management of national power grid, nuclear power, management of national railway and urban railway infrastructure, aviation control, search and rescue services, lottery and money printing among others, said the paper.

The government has announced a list of 103 SOEs in which the state will hold 100 percent stake and another 137 that will be equitized in the 2016-2020 period.

Among those that are to be equitized, the state will hold over 65 percent of the charter capital in four, 50-65 percent in 27, and below 50 percent in 106 SOEs.

Dang Quyet Tien, deputy director of Vietnamese Ministry of Finance's Corporate Finance Department, said publicizing names of the equitized companies with specific rates of state ownership would help avoid enterprises' petitions for maintaining a higher rate of state ownership as had previously happened.

SOEs are not willing to equitize because of leaders' fears that they will be unemployed if controlling stakes fall in private hands.

Besides, due to poor preparations for equalization, private investors are not provided with enough information, and many stakes languish "on the shelves," Tien said.

To ensure that the equalization process benefits both the state and private investors, the government should require better information disclosure by the SOEs and lift the cap on the number of strategic shareholders so as to increase the number of bidders, Tien proposed.

Statistics by the Steering Committee for Enterprise Renovation and Development showed that as of Dec. 28, 2016, the Vietnamese government had sold stakes in 55 enterprises last year, bringing the number of SOEs equitized in the 2011-2016 period to 554.

The 55 equitized enterprises were under the management of the ministries of National Defense, Industry and Trade, and Agriculture and Rural Development, the Vietnam Rubber Group and Vietnam Southern Food Corporation. Endit