667 SOEs equitized but yet listed

Minister of Finance Dinh Tien Dung. (Photo: VNA)

Among 295 SOEs managed by ministries yet to do so, the Vietnam Northern Food Corporation (Vinafood1) has the largest number of equitized but unlisted subsidiaries, 18, including Ha Son Binh Food Company, Vinafood1 Flour Mill Company, VNF1 Distribution – Retail JSC, and Thanh Hoa Food JSC, Dung told the conference on restructuring and improving efficiency of SOE operation in Hanoi.

It was followed by the Vietnam National Textile and Garment Group (Vinatex) which has 14 subsidiaries of such type, including Chien Thang Garment JSC, Vinatex – Tan Tao Investment Corporation and Vietnam Wool JSC.

A number of others are owned by State-run giants like the Vietnam National Petroleum (Petrolimex), Vietnam Electricity (EVN), Vietnam Oil and Gas Group (PVN), Vietnam National Chemical Group (Vinachem), and Vietnam Railways.

These firms mainly blamed the delay in going public on challenges in pushing for organizational and operational restructuring, or not meeting the listing requirements in terms of the number of shareholders or charter capital.

The Ministry of Finance also named 372 unlisted SOEs managed by cities and provinces. Among the concerned localities, Ho Chi Minh City leads the way with 11 corporations and groups with hundreds of subsidiaries that have been equitized but not listed.

According to the ministry, this situation has negative impacts on not only the stock market’s openness and transparency but also the SOEs themselves as these firms have moved relatively slow in post-equitisation corporate management restructuring to reach the standards of those that went public.

Directive 04/CT-TTg issued by the Prime Minister on the restructuring and renovation of SOEs in 2016-2020 requires the SOEs to list their shares on the stock exchanges within a year after their initial public offerings (IPOs).

In August this year, Deputy Prime Minister Vuong Dinh Hue again asked the Ministry of Finance and the Government Office to publicise the list of the SOEs failing to do so in time on the websites of the ministry and the government. It was the third time the list of these SOEs has been ordered to open to the public, after the first in April, 2017 and the second four months later.

Earlier this week, the Ministry of Finance announced that only 11 SOEs were equitised in the first nine months of this year, making the country’s target to complete the equitisation of at least 85 SOEs this year unlikely to reach.

The divestment process during the period was also sluggish and might fail to meet their goals for the year. Under the plan, there were 135 SOEs that had to undergo the divestment process in 2017 and 181 in 2018 but the State had divested capital from only 31 firms, 13 of which conducted the process in 2017 and 18 did so in 2018.