Vietnam intensifies scrutiny of construction equitisation
Vietnam intensifies scrutiny of construction equitisation
Vietnam's government is urging state-owned construction firms and associated regulatory authorities to stringently enforce audit conclusion 1229, aimed at rectifying potential transgressions in the equitisation process and prevention of state asset losses.
The Vietnamese government is redoubling its efforts to enhance accountability in the nation's construction industry, following a directive from the goverment to several regulatory bodies including the Government Inspectorate, the Ministry of Finance, the Ministry of Construction, and the State Capital Management Committee at Enterprises.
The directive mandates strict adherence to audit conclusion 1229, a key report concerning the equitisation and divestment of state capital at various construction entities. The Government Inspectorate has been charged with the responsibility of administering the accuracy and impartiality of the audit, and enforcing compliance, aiming to prevent the potential loss of state assets.
Several construction conglomerates have been brought into the spotlight following this move. State-owned companies such as Vicem, Lilama, VNCC, Licogi, CC1, Coma, Hancorp, and Song Da have all been issued explicit directives to conform to the legal stipulations outlined in the audit. Any detected infractions are to be handled with the utmost severity.
The responsibility of scrutinising the implementation of reorganisation, equitisation, and state capital withdrawal from these enterprises has also been imposed on the corporations. The government hopes that such measures will prevent undue losses of capital and state assets.
In a general push towards better governance, local authorities across the country have been instructed to strictly adhere to land management regulations. These guidelines apply particularly to land areas assigned to the state-owned general construction companies, in an effort to avert any state asset losses during the equitisation process.
The background to this increased oversight can be found in audit conclusion 1229. The Government Inspectorate, in this report, had flagged a series of violations during the equitisation of state-owned general construction companies.
These infractions ranged from enterprise value in financial management – where full enterprise value was not correctly ascertained – to considerable amounts being overlooked during the state capital divestment. Issues regarding land management in the state-owned construction sector were also brought to light.
In its pursuit for justice, the Government Inspectorate recommended an investigation into two cases of financial and land management violations at Mechanical Construction Corporation and Vietnam Water and Environment Investment Corporation. The identified infractions allegedly caused significant losses to the state budget.
