Faster SOE Reshuffle Urged

Over 100 enterprises attended a meeting related to the execution of the Prime Minister’s Decision No. 528/QD-TTg dated June 14, 2005 on a list of equitised company whose shares will auctioned, listed or traded at securities trading centres in Vietnam. The meeting also covered the Minister of Trade’s Decision to conduct the simultaneous application of equitisation and share sales at the stock trading centres.

 

In the first six months of this year, only 195 enterprises underwent reform, of which 154 were equitised, fulfilling 20 per cent of the target set for the year 2005. This equitisation rate is too low. According to the Finance Department for Enterprises under the Ministry of Finance, the sluggish rate has mainly resulted from the overall renewal in the equitisation mechanism provided in Decree No. 187/2004/ND-CP on the reform of State-owned enterprises (SOEs). Many enterprises encountered difficulties in applying the new enactment.

 

On the other hand, a large number of enterprises completed a reshuffle before December 10, 2004 when Decree 187/2004/ND-CP took effect. As a result, not very many enterprises remain. Furthermore, many enterprises that equitised in 2005 are of medium to large scale so that they need more time to complete the required procedures for reform because of its complicated financial issues, such as large accrued debts and bulky outstanding debts.

 

The Ministry of Finance said that in order to speed up the enterprise reform and equitisation process, in the near future, relevant ministries, branches, local authorities and enterprises should contribute their ideas to help authorities at various levels make adjustments to reform policies, and target to complete overall SOE reshuffling plans in the third quarter of 2005. Authorities at all administrative levels should conduct, supervise and urge enterprises that need equitising to observe reform policies. They should pay attention to solving entanglements and imposing severe punishments on any dodges. In particular, they should help speed up equitisation of several giant State-owned corporations and commercial banks in order to create more goods and improve goods quality for the securities market.