New agency to run $222b State capital
New agency to run $222b State capital
The special State capital management committee, which was formed by the Government in early February, may take charge of supervising VND5 quadrillion (US$222.2 billion) worth of State capital in 21 State-owned enterprises.
The special committee, founded in accordance with the Prime Minister’s Resolution 09/NQ-CP dated February 3, 2018, would receive State ownership in the 21 SOEs from ministries and sectors.
The change is included in the draft decree regulating the functions, missions, structure and organisation of the State capital management committee. The draft decree is being publicised for feedback.
Of the 21 SOEs, the State Capital Investment Corporation (SCIC) would be transferred from the finance ministry – its current management agency – to the special committee and it would continue representing the Government to control the State capital in the other 20 SOEs.
The other 20 SOEs are corporations in which the State holds 100 per cent or the controlling stake of the charter capital and lie under the management of the ministries of Industry and Trade, Agriculture and Rural Development, Transport, and Information and Communications.
Those included seven State-run corporations: the Vietnam National Petroleum Group (Petrolimex), the Vietnam National Chemical Group (Vinachem), the Vietnam National Oil and Gas Group (PetroVietnam), the Vietnam Rubber Group (VRG), the Vietnam National Coal and Mineral Industries Group (Vinacomin) and the Vietnam Posts and Telecommunications Group (VNPT).
Among the remaining 13 large-cap SOEs are the Vietnam Mobile Telecom Services Co Ltd (MobiFone), the Vietnam National Tobacco Corporation (Vinataba), the flag carrier Vietnam Airlines, the Airports Corporation of Vietnam (ACV), the Vietnam National Coffee Corporation (Vinacafe) and the Vietnam Railways Corporation (VNR).
In order to manage the VND5-quadrillion capital in 21 SOEs, the committee proposed the Government establish specialised departments based on different industries such as agriculture, manufacturing, energy, construction and telecommunications, and administrative units on personnel development and arrangement, internal risk management and finance and accounting.
The committee also proposed the finance ministry issue instructions on financial procedures for the committee based on the principles that assure the income of the State budget is sufficiently collected from the 21 SOEs and used efficiently.
The foundation of the special committee is expected to fix the wrongdoings of the current business model in SOEs that require a Government unit to supervise the use of the State capital in those companies.
The new “super agency” is also expected to help ministries and provincial people’s committees to improve their administrative work, thus strengthening the business and investment environment in Viet Nam.
However, some analysts have raised concerns that the model is quite new to Viet Nam as the “super agency” would have to manage a gigantic amount of State capital in the large-cap SOEs, which are leading their industries in particular and the Vietnamese economy in general.
