Administrative procedures hinder SOE equitisation process
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VietNamNet Bridge - The equitisation process of state-owned enterprises (SOE), has been, over the past 15 years, but the results of this process, the expectations are not fulfilled. The slow progress in the equitisation is due to the obstacles of administrative mechanisms. According to statistics, up to the end of 2006, the country had only 2176 companies including 100 percent of the country’s capital, from a total of nearly VND260, 000 billion euros. To accomplish the goal equitisation by the year 2010, the government equitise more than 1500 enterprises. Until the end of 2010, the country will have 554 companies to 100 percent of the nation’s capital. But in 2007, only 82 companies have been equitised, 21 percent of the achievement of objectives. Intervention inappropriate The slow progress in the equitisation is due to the obstacles of administrative mechanisms. Lawyer Vu Tien Xuan VFAM of Vietnam consulting company has identified five major obstacles, including the legal framework of the inaccurate equitisation process of enterprise policy, rapid changes in government regulations, difficulties in achieving many goals at the same time and indifference of officials companies, difficulties in the equitisation process. Mr. Tien said some senior officials to use their power within companies, even if they have been equitised. For example, a vice president of central Khanh Hoa province, the Popular Committee uses his cell phone for a general meeting of the Phan Thiet Joint Stock Company, which have been implemented in accordance with the laws in force. Vice President of the province of Ninh Binh’s People’s Committee, a document that does not address the recognition of the results of the general meeting of the medicine Ninh Binh Joint Stock Company. It is really inappropriate interference in the equitisation process of the company. The fear of a loss of interest, government officials cited many reasons for the delay in the equitisation process. Currently, the fluctuation of the stock exchange is another reason that would have an impact on the process. If Initial Public Offering (IPO) is hard to sell, the equitisation process continues. How to solve the problem to be solved Lawyer Cao Ba Khoat, director of the K Unternehmensberatung GmbH & Associates, said that enterprises equitisation is not as a selling strategy. There is, however, a number of problems with regard to pricing and payment terms. According to Mr. Khoat, it is absolutely necessary to establish an adequate legal framework for equitisation process and simplify procedures. In particular, agencies should be functional in close collaboration with industry, for instructions and help them become familiar with the problems that may arise during the process equitiation, so that the implementation process can be a a transparent and legitimate. Dr Pham Sy Liem, vice president of Vietnam General Construction Association, said that in the equitisation process, administrative agencies should function as advisers, trainers and accountants. It is only in the management of administrative violations. In addition, to settle disputes and problems related to the evaluation of assets and business are covered by the economic courts, which require support for the continuation of economists. The courts have no relations with the management of the economy, agencies make a fortune, and the system is less complicated than the management system, he added. Mr. Liem further stressed that, in any event, it is necessary to ensure that the normal functioning of enterprises, which have not yet gone bankrupt. Warrants management should not ask the company to stop its activities for the “treatment”. People who make decisions or to give their opinion on what the suspension of the activity, face criminal sanctions and compensation for damage caused by enterprises, in accordance with the decision of the administrative courts. Indeed, after the equitised corporation registered capital is high, but their assets is very low. Thus, the competitiveness of enterprises in the post-equitisation is quite low. To remedy this problem, “said Khoat, it is important to conduct a review of the regulations of the state, ownership of the company’s shares (51 percent) to avoid intervention in the affairs of the owners. Cao Dang Vinh section of the civil law under the Ministry of Justice said that equitisation slowly poses great challenges for Vietnam in the current process of integration. Nevertheless, the legal and regulatory framework for equitisation present is not strong enough, because Vietnam has decrees, but no laws in this area, which is critical of person, if they do not fulfil their mission. |