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New regulations issued over operation of SCIC
The Government has issued two new decrees over the operation mechanism of the State Capital Investment Corporation (SCIC).
The decrees prevent the SCIC from investing in companies of relatives but allow it to found subsidiary companies.
Under Decree No 147/2017/ND-CP, SCIC is not allowed to pump capital into buying stakes at enterprises, where the managers are related to the corporation’s chairman, members of the Management Board, controllers and general director, as well as deputy general director and chief accountant.
The relatives include spouses, natural parents, adoptive parents and natural son/daughter, as well as adoptive son/daughter, natural brother, natural sister, brother-in law and sister-in-law.
SCIC will not be allowed to contribute capital with its subsidiary companies to found joint stock companies, limited liability companies or implement business co-operation contracts.
The Decree No 148/2017/ND-CP allowed SCIC to found and contribute capital to subsidiary companies, including fund management companies, following the established laws.
The two decrees were issued and took effect early this week.
SCIC had a charter capital of VND50 trillion (US$2.2 billion). It was founded in 2005 and officially began operation in 2006, with an aim to enhance the efficiency of State capital at enterprises.
SCIC planned to earn a revenue of VND11.2 trillion and a pre-tax profit of VND8.3 trillion in 2017.
Its business report in the first half of this year, the latest one available on its official website, showed that SCIC earned a revenue of VND2.67 trillion in the period, dropping by VND3 trillion over the same period last year. The pre-tax profit also dropped by more than VND2 trillion to VND2.5 trillion.
As of June 30, SCIC’s total assets reached VND60.8 trillion.
SCIC was managing State capitals worth VND18 trillion in book value at 144 enterprises.
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