Gov’t to punish recalcitrant SOEs
Gov’t to punish recalcitrant SOEs
Leaders of qualified State-owned enterprises (SOEs) will face demotions, salary cuts, fines and even criminal charges if they fail or delay listing on the Unlisted Public Company Market (UPCoM).
These are some of the drastic measures being considered by the Ministry of Finance (MoF) and the Government Office (GO) as part of efforts to speed up equitisation and induce more transparency into the process.
Deputy Prime Minister Vuong Dinh Hue has also instructed the MoF and GO to investigate and hand out stiff punishments to businesses and commercial banks that do not finalise the procedures despite being qualified to list on the UPCoM.
The MoF will compile a list of equitised SOEs where the State still retains 36 per cent or more of its stake, as well as those with zero to 36 per cent of State capital, though the decision for the latter to become listed is contingent on the company’s shareholders.
In the last six months of 2017, any enterprise tardy about going public on the UPCoM will be heavily fined under Circular 36/2017/TT-BTC which has been in effect since June 15, 2017.
Companies failing to list or register 12 months later than requested by the State Security Commission of Viet Nam will attract fines of VND300 million to VND400 million (US$13,342 to $17,790).
The MoF has also asked the Government and responsible departments and localities to consider disciplinary action against the leadership of companies that are dragging their feet on completing listing procedures.
The disciplinary actions would range from demotions, transfers, salary cuts to more serious criminal charges.
The threat of severe action has prompted several companies to hasten their listing procedures. Officials expect a spate of companies being listed in the second half of the year.
In just five days (July 17- 21), 14 companies have successfully listed their stocks on the HNX, UPCoM and the Ho Chi Minh Stock Exchange (HOSE), with a total of more than 500 million shares.
On July 20, the Binh Duong Water Environment Joint Stock Company, with stock code BWE, listed 150 million shares listed on the HOSE at the referential price of VND14,300 per share (63 cents); while the Viet Thang Corporation, stock code TVT, listed 21 million shares at VND35,000 per share ($1.55).
Meanwhile, the PetroVietnam Power Corporation (PV Power) is preparing its initial public offering (IPO) for late next month. The Government is seeking strategic investors for the firm and planning to decrease its holdings to below 50 per cent. Around 45 per cent of PV Power’s total shares will go to the strategic investors, while three to four per cent will be reserved for the IPO.
The Deputy PM has ordered that all State-owned commercial banks are listed on the UPCoM in order to improve transparency in their operations and generate more opportunities to raise capital.
As of now, at least 10 banks with a total charter capital of VND95 trillion ($4.2 billion) plan to be listed on the UPCoM. Meanwhile, the Vietnam Prosperity Joint-Stock Commercial Bank, with a chartered capital of VND14.06 trillion ($625 million), has registered to list more than 1.33 billion shares on the HOSE.
In a document published last week, Deputy PM Hue also demanded that a list of 730 equitised companies yet to be listed on the UPCoM as of June 2017 be published on the Government’s online portal.
