Amending the Law on Management and Use of State Capital to invest in production and business in enterprises to improve the legal framework and improve the efficiency of SOEs. Photo: ST

Create a relatively complete legal framework

According to the Ministry of Finance, after more than six years of implementing the Law on Management and Use of State Capital to invest in production and business in enterprises (Law No. 69/2014/QH13), a relatively complete legal framework has been established to comprehensively adjust activities for state capital investment in production and business in enterprises. With Law No. 69 and guiding documents, mechanisms and policies on the management and use of state capital and assets invested in SOEs have been synchronously and step-by-step built in line with national laws, international practices and requirements for innovation and integration; ensuring respect for and enhancing the autonomy and responsibility of enterprises along with strengthening the State's inspection and supervision in the management and use of capital and assets invested in production and business at enterprises; creating a full and stable legal environment for the management and use of state capital and assets at state agencies and enterprises, contributing to the restructuring of SOEs in the direction of reducing focal points, improve operational efficiency and maintain mobilization as well as make significant contributions to the state budget.

However, according to the Ministry of Finance, a number of guidelines, views and legal systems related to the management and use of state capital invested in production and business in Vietnamese enterprises have seen changes. The implementation process of Law No. 69/2014/QH13 and its guiding documents through the review revealed a number of shortcomings and limitations that needed to be reviewed and revised to be suitable with reality in the orientation of restructuring SOEs.

The shortcomings pointed out by the Ministry of Finance include the scope of adjustment does not include the content of restructuring state capital in enterprises. Determining the management content of state capital invested in enterprises has not been transparent, and the identification of capital and assets of enterprises with state capital investment leads to a lack of understanding and direct intervention in business and production management of enterprises.

The process of restructuring state capital in enterprises in recent years has been mainly carried out in the form of ownership conversion, which is equitization, which is regulated by the Government's Decree, so the legality is not high.

Some management issues in enterprises with 100% charter capital held by the State (F1 Enterprises) are still inadequate. Accordingly, the amendment of Law 69/2014/QH13 is to overcome limitations and inadequacies. It is necessary to continue to perfect the legal framework to ensure the development and improve the operational efficiency of SOEs.

Resources obtained from restructuring state capital will be invested in enterprises

The development of Law 69/2014/QH13 (amended) aims to improve the efficiency of using state capital invested in production and business in enterprises; separate and clearly define the function of owner of assets and capital of the State from the function of state management of all types of enterprises, and the business administration function of SOEs; perfecting a synchronous institutional system, creating a favorable legal framework, simplifying administrative procedures, transparency and efficiency in management, supervision and operation in the management and use of state capital to invest in production and business in enterprises.

With the above goal, in the draft Law on Management and Use of State Capital to invest in production and business in enterprises (amended), the Ministry of Finance proposed to amend and supplement regulations on investment of State capital into enterprises, including determining the management content for state capital invested in enterprises with four main contents. According to the Ministry of Finance, the regulation of state capital after it has been invested in an enterprise to fulfill the obligations to contribute state equity capital is defined as the property or capital of a legal entity of the enterprise in accordance with the provisions of the Civil Code, ensuring the principle of equality and autonomy in the operation of a legal entity that is an enterprise.

Regarding resources and the process of investing state capital in enterprises, the Ministry of Finance said that it is necessary to review and supplement regulations to clearly define the resources obtained from restructuring state capital invested in enterprises and the source of profits or shares.

The dividend divided by the state capital contributed in enterprises must be transferred to the state budget for use in concentrated investment for state-owned enterprises that need to maintain 100% charter capital or enterprises with state capital operating in the state budget which is operated in a number of fields that are effective or play a large role in the economy; the rest is used for investment and development in accordance with the Law on State Budget.

In the process of state capital investment in enterprises, it is necessary to specify more specifically the level and authority in the direction of the National Assembly to decide the policy of investment capital of VND10,000 billion or more in enterprises (equivalent to the level of public investment capital of the project of national importance), below this level, the Government will stipulate the decentralization for agencies to decide on an investment policy in enterprises (regardless of investment in central or local enterprises).

Regarding the ownership conversion and enterprise re-arrangement, the draft law also defines the following principles: reviewing and approving the land use plan before equitization in accordance with the provisions of the land law and the law on public property; enterprise value must be revalued close to the market through an organization with the function of price appraisal and as a basis for determining the starting price; the sale of shares and divestment must comply with the principles of the market, publicity, transparency, and maximize socio-economic benefits for the State. Enterprises after equitization must register for transactions and list on the stock market.