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The loopholes in supervising big economic groups
Most of the economic groups that monopolize the fields in which they operate do not expose information under any circumstances, even when this is required by the laws, according to the Central Institute of Economic Management (CIEM).
CIEM, which has just conducted a survey on the transparency in the operation of State owned enterprises (SOEs), has discovered loopholes in SOE corporate governance.
Supervision: Not transparent, and not objective
Tran Tien Cuong, Head of the SOE Renovation committee under CIEM, said that most SOEs, including monopoly economic groups, still do not meet the requirement in information exposition.
The survey team stressed that many big SOEs and monopoly economic groups do not expose information under any circumstances, including information that by law is subject to mandatory exposition. For example, information subject to mandatory exposition include corporate risk management policies, decisions on awarding key staffs, stakes trading or information about the transactions carried out by members of boards of directors.
In general, the information that they call “sensitive” and “important” has always been listed as “top secret” information which has never been exposed.
CIEM has found out that only 27 percent of SOEs released information about the inner purchases of stakes, 28 percent of SOEs released information about contract transactions, 35 percent of enterprises released information about the payments to members of the boards of directors, 42 percent made public the bonus sums given to members of boards of directors, while only 26 percent of enterprises made public their risk management policies.
Businesses’ reports prove to be the only “tool” to supervise their operation. Meanwhile, not all reports contain sufficient information, while the honesty of the reports remains a problem. Therefore, experts say the inner supervision,the supervision carried out by the divisions of the enterprises themselves, do not show effects.
CIEM has pointed out that 29 percent of SOEs said they never evaluate the results of the work of general directors or deputy general directors. The assessments were carried out at some enterprises, but the number of business managers who received unfavorable marks was always very low.
Very few enterprises say the state, the real owner of SOEs, rarely supervises the enterprises’ operation on important issues. For example, 28.9 percent of owners supervised the establishment of subsidiaries, 21.1 percent supervised investments in other fields (finance, banking, real estate, stocks), 28.9 percent supervised unhealthy competition and 31.6 percent supervised investments in non-forte business fields.
Economic groups aim to make profit or work for public benefit?
Cuong said that the purposes of SOEs, especially economic groups, have been diversified. The enterprises not only operate for profit but in many cases they have to manage the social and political duties assigned by the State. Since the purposes and the tasks of the enterprises remain unclear, there are not clear criteria to supervise the operation of the groups.
Pham Tuan Anh, Deputy Director of the Enterprise Renovation Department under the Government Office, said that in many cases, state-owned groups do not have the same positive business results as non-state enterprises operating in the same fields. For example, the Vietnam Post and Telecommunication Group (VNPT), is taking a loss with fixed line services (it can collect only tens thousands dong a month for telecommunication in rural or remote areas). However, it still has to provide these services because it is a political task.
Who will take responsibility for problems?
Cuong said 23 percent of enterprises said that there is overlapping of roles of the state in the enterprises as both the owner and as the management agency. 21 percent of enterprises said the state acts as an administrative agency rather than an investor, even though the state is the actual owner of the enterprises. Six percent of 100 percent SOEs said the State, as the owner of enterprises, is loosening its management.
Tran Xuan Lich, Deputy Head of CIEM, cited Vinashin as an example. The giant shipbuilding group has been discovered continuously taking profits and unable to pay debts. “Everyone says he will take responsibility for the problems with Vinashin, but it is still unclear who will do that,” he said.
Pham Huyen
vietnamnet
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