Inspectorate puts SOEs in firing line

The inspectorate last week told the National Assembly Standing Committee that it would inspect Vietnam Rubber Industry Group (VRIG), Housing and Urban Development Group (HUD), Vietnam Textile and Garment Group (Vinatex) and Vietnam National Petroleum Group (Petrolimex) this year. More state-owned groups and corporations will also be in the firing line.

The inspectorate’s move came after its recently concluded inspections of PetroVietnam, Song Da, Vinachem, Viettel, Vinalines, EVN and VNPT. The move also came after the inspectorate recently wrapped up its inspection of anti-corruption activities at five corporations including HUD, Vietnam Cement Industry Corporation, Vietnam National Coffee Corporation, Vinafood 2 and Vietnam Steel Corporation. Almost all of those state-owned enterprises (SOEs) were found to have violated state capital usage regulations and suffered from big losses.

For instance, PetroVietnam, Song Da, Vinachem, Viettel and Vinalines were found to have misused the state budget worth VND33.77 trillion ($1.62 billion).

“These companies have failed to obey regulations in implementing investment procedures for projects, public procurement, and bidding appointment,” said the inspectorate’s head Huynh Phong Tranh.

Dinh Tien Dung, head of State Audit of Vietnam (SAV), last week also told the National Assembly Standing Committee that the SAV in 2011 conducted 151 audits over four economic groups, 17 corporations, two companies and five financial, banking and insurance organisations. Results showed that they misused VND21.76 trillion ($1.04 billion).

According to an SAV report on auditing results on state budget usage in 2010, nearly all of the 27 audited groups and corporations failed to sufficiently contribute to the state coffers in 2010. They were asked by SAV to pay back the state budget a total of VND8.124 trillion ($390.57 million).

Almost all of the audited groups and corporations were found to have ineffectively non-core investment activities. For instance, Vinalines’ non-core investment was VND672 billion ($32.3 million), equivalent to 10.37 per cent of its charter capital, while the figure for Vinacomin was VND1.83 trillion or $88 million tantamount to 12.09 per cent of its charter capital, EVN (VND4.55 trillion or $218.7 million equating to  4.13 per cent of its charter capital) and Vicem(VND634.9 billion or $30.5 million occupying 5.27 per cent of its charter capital).

The non-core investments, especially in finance, banking, securities, insurance, telecommunications and property, saw big losses. For instance, EVN made a loss of VND1 trillion ($48 million) due to its ineffective investment in telecommunications. In another case, investment in securities has earned a loss of VND359 billion ($17.2 million) for Sai Gon Beer, Alcohol and Beverage Corporation.

“State-run groups and corporations are making big dents in the state coffers. It is recommended that the government halt the establishment of new groups and corporations immediately. All current regulations for operations of state-owned groups and corporations must also be revised,” Tranh said.