The production and business activities experience fluctuations due to the Covid-19 pandemic, plus the equitization and divestment progress was still slow compared to the plan approved by the Prime Minister, which placed an urgent requirement for further improvement of legal documents.

Some criteria related to equitized SOEs are also being considered for revision.
Photo: ST

Difficult to obtain target

The recent report by the Ministry of Finance said that the total revenue of corporations in 2020 is expected to reach VND1,327,496 billion. Profit before tax is expected to reach VND78,086 billion and arising amounts payable to the state budget is expected to reach VND157,273 billion. However, due to the impact of the Covid-19 pandemic, most of the state-owned economic groups and corporations may not meet the targets for 2020.

According to statistics for the whole period from 2016 to September 2020, there are 178 enterprises approved by competent authorities with their equitization plans with a total enterprise value of VND443,503 billion, of which the value of state capital isVND207,116 billion. However, out of which there are only 37 equitized enterprises under the plan, reaching 28%. The number of enterprises that still have to equitize according to the 3-month plan in the rest of 2020, is 91 enterprises.

With divestment, accumulated from 2016 to September 2020, the total divestment is VND25,669 billion, earning VND172,917 billion.

Of which, state capital divestment in 102 units according to the plan approved by the Prime Minister reached a value ofVND4,964 billion, earning VND9,643 billion. State capital divestment from non-listed businesses is VND3,785 billion, earning VND110,392 billion. State corporations and corporations withdrew VND16,919 billion, earning VND52,881 billion.

With the achieved results, it can be affirmed that the progress of equitization and divestment is still slow compared to the plan. The Prime Minister has issued Decision No. 26/2019 / QD-TTg approving the list of enterprises to be equitized until 2020 with 93 enterprises having to complete the enterprise value announcement.Three of 93 have been completed so far.

Enterprises implementing large-scale equitization such as Vietnam Posts and Telecommunications Group (VNPT), Vietnam Chemical Group, Vietnam Coal and Mineral Group, Northern Food Corporation, Vien Corporation through Mobifone, the Bank for Agriculture and Rural Development (Agribank) have not yet completed the approval of the land use plan to be able to conduct enterprise valuation. Divestment progress also only reached 26.4% of the plan.

Recently, the Prime Minister issued Decision No. 908 / QD-TTg dated June 29, 2020 approving the list of enterprises with state capital to withdraw capital until the end of 2020 with 124 enterprises having to complete the divestment; and 14 enterprises transferred to SCIC (State Capital Investment Corporation).

Facing this situation, the Ministry of Finance has proposed a series of solutions in the remaining months of the year, in which the most important is to continue to improve the institutional and legal framework. In the immediate future, it is to develop and submit to the Government for promulgation a Decree amending and supplementing a number of articles of Decree No. 126/2017 / ND-CP on the transformation of state enterprises and single-member limited liability companies with joint ventures. State-owned enterprises invest 100% of their charter capital into joint stock companies, Decree No. 91/2015 / ND-CP on state capital investment in enterprises and management and use of capital and assets in enterprises and Decree No. 32/2018 / ND-CP amending and supplementing a number of articles of Decree No. 91/2015 / ND-CP. This is considered the overall correction, expected to bring about many changes.

Adjust capital every year

One of the important contents that the Ministry of Finance pays attention to in the amendment and supplementation of the above documents is the regulations on charter capital, re-determination of capital, increase and decrease of charter capital, as well as the additional investment of the charter capital of SOEs.

According to the draft, the enterprise will develop and report to the owner's representative agency a plan to determine the charter capital and additional investment in charter capital (determined at least within three years). The owner's representative agency shall appraise and consult the finance agency of the same level to sum up and submit to the Prime Minister for consideration and decision on the plan to determine charter capital and additional investment sources for enterprises.

The draft also adds the content before December 31, 2020, based on the regulations on the determination of charter capital and additional investment in capital for operating SOEs.

SOEs must prepare a plan to determine charter capital and sources of investment capital for supplemental investment to report to the owner's representative agency for submission to the Prime Minister for consideration, decision and implementation of additional capital investment and adjustment of charter capital according to regulations.

A number of criteria related to equitized SOEs are also being considered for revision. Accordingly, regarding the valuation of the enterprise, the Ministry of Finance plans to complete the direction: if the enterprise has to re-conduct the valuation, suspend equitization or stop the implementation of equitization according to the decision of the competent authority, the representative agency of the owner will consider and decide to handle the equitization expenses (ensuring sufficient reasonable and valid documents) to account into the expenses production and business of enterprises and enterprises are not allowed to deduct when determining taxable income of enterprise income tax.

Regarding regulations related to the comparison of specific receivables and payables to a number of enterprises (state-owned commercial banks, Vietnam Posts and Telecommunications Group) in accordance with the nature and specificity of assets and liabilities of each of these subjects are feasible and do not affect the equitization progress, the Ministry of Finance proposes to supplement in the following direction: for receivables from customers using services, postpaid telecommunications, information technology and television (domestic and foreign) regularly arise with a large number of customers of equitized enterprises, but the comparison and confirmation of debt with each customer arising a large amount of work, time and expenses, the owner's representative agency decides the appropriate comparison and certification based on the accounting records and the information technology system of guest management in equitized enterprises.