Ramp-up of effort proposed to reach equitisation target

illustration photo source: baodautu.vn

The government has set forth the goal of completing the equitisation of 432 state-owned enterprises (SOEs) during 2014-2015.

Only 143 SOEs have been equitised last year, proving the timely completion of government targets quite a challenge.

According to Vu Bang, chairman of the State Securities Commission (SSC), in order to finalise equitising all 289 remaining SOEs within the year would require more than a mere resolution, it is crucial to amend and supplement a raft of legal documents to tackle the impediments derived from the process, such as the diversification of state capital ownership.

“Besides, enterprises need to recommend proposals on how to solve their problems with relevant management agencies when facing hardships,” Bang added.

The Ministry of Transport (MoT) has proven an example of success in terms of equitising SOEs and state capital divestiture.

In 2013, when the market grappled with difficulties, the MoT still managed to equitise 97 businesses, including 14 corporations.

“At that point in time, many had assumed achieving such a target was unrealistic, but we fulfilled the goal,” said Vu Anh Minh, head of the Business Management Department of the MoT.

Regarding successful lessons and cases of SOE equitisation and state capital divestiture, Minh said, “We need to be creative in implementation. When there are irrationalities, it is important to propose rectification measures with the cooperation of the government as well as management agencies and suggest pilot implementation.”

Giving an example, Minh stated that according to current regulations, consulting units for equitisation are to be selected through bidding.

In fact, it may take up to several months to complete this task. To shorten the process, the MoT has proposed selecting the consultants through appointment instead of holding bids.

Minh also suggested linking the responsibilities of corporate and management agency leaders to specific businesses to enhance process efficiency.

Bui Hoang Hai, deputy head of SSC’s Issuance Management Department, has attributed modest success rates of public auctions to firms faring poorly in satisfying their information disclosure obligations.

“To appeal to investors at their IPOs, businesses need to ensure to deliver clear, sufficient and transparent information about their operations and release information earlier allowing the investors to be well prepared before making investment decisions,” said Hai.