Restructuring of corporations raises concerns
Restructuring of corporations raises concerns
Economists have doubts about the significance and purpose of state-owned enterprises’ (SOEs) restructuring after witnessing equitization of several big corporations.
The news that the Southern Food Corporation (Vinafood 2), which has major influence on rice exports, will be equitized has caught the attention of economists only, not investors.
Dr. Vu Trong Khai, a renowned expert in agricultural production, commented that the state would keep 65 percent of Vinafood 2 shares after equitization.
“No changes will be made, as only 35 percent of Vinafood 2’s shares are on sale,” he said.
“The corporation will still be managed by the same managers – state officials – and the same management method. The major aim of equitization is to transfer ’dead assets’ in the state’s hands to others who can help reform enterprises and develop them,” he explained.
According to Khai, the sale of 35 percent of Vinafood 2’s shares will only benefit the current managers of the corporations, because under current laws, they can only buy shares at preferential prices.
“Meanwhile, big investors will not be foolish to buy the remaining 35 percent of shares, because they will not become the real owners of the enterprise with just a small proportion of shares,” he said.
The expert emphad that the State equitizes enterprises to change the ownership mode of enterprises, not to earn money from selling shares.
The equitization of Vietnam Airlines, the national flag air carrier, was also described as a “halfway measure” to restructure the enterprise.
Dr. Nguyen Dinh Cung, head of the Central Institute for Economic Management (CIEM), commented that the equitization of the airline as planned will not lead to changes in corporate governance, even though this is the aim of equitization.
“Why equitize Vietnam Airlines?” Cung said.
Khai agreed, saying that he cannot see the benefits of the equitization, if the State still holds 75 percent of shares in the air carrier.
Meanwhile, Vietnam Airlines has asked to retain the surplus from share sales to increase the state’s investment capital in the enterprise, and has asked for other preferential treatment.
Khai said Vinafood 2 would also be equitized under the same scenario.
In order to restructure Vinafood 2, there is only one choice – changing the ownership mode and turning it into a joint-stock corporation, in which the state will not have shares or hold 20 percent of shares at maximum.
Bui Ngoc Son, MA, from the Institute for World Politics and Economics Studies, also noted that the “halfway equitization” would only “give more opportunities to corrupt people”, and that the state should not tighten its controlling stakes in enterprises but withdraw its capital from enterprises so the latter would be forced to reform.
vietnamnet
