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State still controls equitised firms
Deputy Minister of Finance Tran Van Hieu spoke to Thoi bao Tai chinh Viet Nam (Vietnam Financial Times) about the conversion of State-owned enterprises into single-member limited liability companies.
What is the difference in State supervision of single-member limited liability companies after they are converted from State-owned enterprises?
In essence, single-member limited liability companies are not different from State-owned enterprises; they are still under State management and supervision. The content is specified in Government decree 25/2010/ND/CP.
Regarding the legal framework, the State-owned Enterprise Law 2003 has been invalid since July 1. This has also led to the invalidation of other relevant decisions, decrees and circulars.
To supervise these companies, the Ministry of Finance is drafting a decision to oversee the finances of wholly State-invested enterprises and State-owned enterprises with a majority State share.
The decision will regulate these entities' responsibilities in making and sending reports to supervisory offices in addition to other regulations.
Accordingly, enterprises must present periodic reports on capital mobilisation, management and use to proprietors and the Finance Ministry so they can supervise fixed assets; investment in sensitive areas, such as banking, insurance, stock; debt management and the salary fund.
Could you be more specific about the differences in supervising limited liability companies at present compared with State-owned enterprises in the past?
Supervising single liability limited companies must be uniform. Specific responsibilities should be devolved to enterprises and their proprietors.
Specifically, enterprises must make reports every six months to inform relevant offices about investment projects, the actual situation of capital mobilisation and use, and the result of financial activities, among others.
Proprietors also have responsibilities in supervising financial situations in their enterprises. They include requesting their enterprises to file reports and send them periodically, analyse the financial situations in enterprises, put forth measures to rectify weaknesses in management and business activities.
Proprietors will be responsible before the Prime Minister if they fail to introduce measures to address mistakes and wrongdoings or submit supervisory reports to the Ministry of Finance on time.
The State Capital Investment Corporation oversees State capital in a State-owned enterprise. What is the corporation's role in managing State capital in a single-member limited liability company?
Under decree 25/2010/ND/CP, the State Capital Investment Corporation is entrusted with the role of proprietor of single-member limited liability companies which are converted from independent State companies, except those limited liability companies which are converted from parent companies, general companies and large-scale State companies and State-owned companies directly serving national defence and security purposes and public tasks.
As the overseer of State capital in single-member limited liability companies, the corporation will ensure the rights and duties of proprietors are implemented as regulated by the State.
Difficulties in assessing assets and determining land values as parts of enterprises' capital are among obstacles that are slowing down the equitisation process in State-owned enterprises. Will there be any change in this issue?
Presently, wholly State-invested enterprises are being equitised. But some shortcomings have been exposed when implementing decree 109/2007/ND/CP referring to equitisation.
The State has assigned the Finance Ministry to draft another decree to replace the original with changes including the determination of land value in such circumstances.
This issue is the biggest difficulty and has attracted many opinions. Thus, the Ministry of Finance has built in a requirement that enterprises send land-use projects to municipal and provincial People's Committees in their localities for vertication and approval before deciding on the value of their land.
Other issues, such as the requirement for local governments to determine land value within 30 days, are also mentioned in the draft.
The ministry is expected to submit the draft to the Government for consideration and approval in the fourth quarter of this year.
VietNamNet, VNS
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