In 2016-2020, the restructuring of State-owned enterprises (SOEs) has achieved some positive results, but reality still requires further restructuring of the SOE sector. Strong and breakthrough solutions are needed to bring a new look to this important economic area

VNPT is one of the "big companies" that has not yet implemented equitisation. 

Five new points in restructuring State-owned enterprises

According to the Ministry of Finance, the results of SOE restructuring in 2016-2020 showed the reasonableness and accuracy of the restructuring, equitisation, divestment and improvement of the operational efficiency of the SOEs. SOEs now have a more rational structure, focusing on key sectors and fields. However, equitisation and divestment have not reached the goals and according to the plans, there is also an equitisation of 89 enterprises and a sale of state capital in 250 firms. The proportion of State capital held in enterprises after equitisation is still high, not reaching the target of changing corporate governance practices.

The operation of SOEs has improved and many State-owned groups and corporations have played a leading role, creating prestigious brands in the region and the world. However, the SOE sector has not yet achieved efficiency commensurate with its assigned resources, there are still many SOEs that have not really renewed fundamentally their corporate governance, management thinking and business activities. Public disclosure of the financial situation and production and business activities results are limited; there are still SOEs and SOE leaders who lack bravery and negative behaviour during operations. Therefore, the requirement for SOE restructuring associated with corporate governance innovation according to international practices and proactively adapting to the Industrial Revolution 4.0 is a central requirement and task for SOEs.

In addition, in 2016 - 2020, despite focusing on dealing with the shortcomings and weaknesses of SOEs, the results achieved are not yet satisfactory. The requirement for 2021 - 2025 is to continue restructuring SOEs to improve SOEs' performance to respond to the conditions of deep and broad integration of the economy.

The SOE Restructuring Scheme with a focus on State corporations in 2021-2025 is under construction and accordingly, the drafting agency has set out four objectives, six tasks and nine solutions to continue restructuring SOEs in the new period, striving to basically complete restructuring of SOEs in the form of mainly equitisation, divestment, publicity and transparency by 2025, bringing the highest efficiency to the State.

According to the Ministry of Finance, the SOE restructuring project for 2021-2025 has many new contents and perspectives. First of all, the project adjusts the target compared to Decision 707/QD-TTg for the restructuring. The equitisation and divestment are only measures to rearrange and improve the performance of SOEs.

Along with that, proposing a pilot model of converting several economic groups and State-owned corporations from 100% state-owned enterprises operating in the form of one-member limited liability companies to operate under the form of joint-stock companies with 100% charter capital owned by agencies, organisations and enterprises (such as SCIC). In addition, enhancing the accountability of SOEs and SOEs with dominant State capital to the representative agencies, the National Assembly and the People's Councils at all levels according to the proportion of capital invested in firms for matters related to ensuring the interests of the people, the interests of the country during the operation of companies.

In addition, many SOEs will be piloted after equitisation with tge registration for trading and listing on regional and world stock markets. The final point is to develop a restructuring scheme for each SOE.

Need for breakthrough changes

Regarding the pilot model of transforming several economic groups and State-owned corporations from 100% State-owned enterprises operating in the form of one-member limited liability companies to joint-stock companies by agencies, State-owned organisations and enterprises (such as SCIC) holding 100% of the charter capital, according to the evaluation of the Ministry of Finance, in the world, many countries have applied such as Japan and Germany.

Germany has about 10,000 companies, of which about 1,000 are listed on the stock market, the transfer of State capital or social capital mobilisation is done through the stock exchange. The Ministry of Finance said applying this model can ensure publicity, transparency, and convenience for divestment or capital mobilisation through the stock market. This solution also adds a tool to accelerate the construction of 17 large-scale State-owned firms, leading the economy under the scheme being built by the Ministry of Planning and Investment.

This project also proposed a solution to define the capital management in enterprises and the management of business and production activities of enterprises towards hiring and recruiting enterprise managers for firms with more than 50% of State capital. Regarding separating the management of the State owner's representative agency from the rights of enterprises and the ownership of enterprises, Dang Quyet Tien, Director of the Department of Corporate Finance, said this is also a breakthrough content in the amendment of the Law on Management and Use of State Capital to Invest in Enterprises. At this point, it is necessary to clarify to help firms feel secure in production and business. This is also the premise for promoting and creating a breakthrough in human resources, turning the profession of running a business into a profession for competitive bidding and selecting talented people.

Assessing the solutions to restructuring SOEs in the next period, according to Assoc. Prof. Dr. Dinh Trong Thinh, Academy of Finance, the important and necessary issues in equitisation and divestment in particular and SOE restructuring in general are responsible for heads of ministries, sectors, localities and firms. Another solution is to hire executives after equitisation to change management methods. These proposals aim to make the equitisation process implemented in the best and most effective way.

With these solutions, Assoc. Prof. Dr. Dinh Trong Thinh believes it will create a new momentum for the equitisation and restructuring process of SOEs with the highest determination in a short time.

“I think that the implementation of a series of solutions will bring a new look and a new vitality to equitised SOEs, especially the solutions associated with the responsibilities of the heads of ministries, sectors, localities and enterprises. We hope that with these solutions, if we apply them vigorously and aggressively, it is possible to bring about benefits in improving the efficiency of equitisation, the structure of SOEs in the new phase,” Assoc. Prof. Dr. Dinh Trong Thinh said.

Solutions for enhancing the responsibility of the head:

-Associate the responsibilities of the heads of ministries, ministerial-level agencies, government agencies, Chairmen of People's Committees of provinces and centrally-run cities, Chairmen of People's Committees of provinces and centrally-run cities, Chairmen of Members' Councils of economic groups, corporations, and SOEs with approval of plans to restructure enterprises, organise and supervise effective implementation approved plan. Responsible for the head of the representative agency of state capital owners with the disclosure of information of enterprises.

- The Chairperson of the Members' Council, the Chairman of the Board of Directors of Economic Groups and State Corporations is responsible to the required.