Sep 19, 2018 / 16:25

Privatization of Vietnamese state firms requires greater transparency

The Hanoitimes - SOEs have relied heavily on preferential treatments and pay little attention to the importance of investing in production and corporate governance for efficiency.

Transparency in corporate governance and potential of the state-owned enterprises (SOEs) in subject for equitization are key for investors to take part in the process, a view was shared among experts at an online talk held by the government portal on September 18.
 
Illustrative photo.
Illustrative photo.
SOEs account for nearly 1% of the total number of Vietnamese enterprises, but play a key role in the economy, contributing 30% to the country's GDP. However, the efficiency of the state sector remains at a low level and does not match the huge resources under its disposal. 

Economist Luu Bich Ho said SOEs have enjoyed preferential treatment for a long time, including having greater access to land and capital, which reduces its competitiveness and efficiency. This has resulted in an unfair business and investment environment.

Sharing Ho's view, Phung Van Hung, permanent member of the National Assembly's Economic Committee, said SOEs have relied heavily on preferential treatments and pay little attention to the importance of investing in production and corporate governance for greater efficiency. 

With regard to the SOE equitization process, Hung stated that the quality of the process has been improved but remains slow compared to the government's schedule. According to Hung, a lack of efforts from ministries and government agencies is considered one of the main reason for this issue. 

Under this circumstance, the introduction of the Committee for State Capital Management, which will manage state capital in 19 state-owned economic groups and corporations, should be seen as a vital step to speed up the process. 

Additionally, enterprises are required to go public after completing the equitization process, which would improve governance and transparency of the SOEs, Hung added. 

Dang Quyet Tien, director of the Ministry of Finance's Corporate Finance Department, informed that 700 equitized SOEs have not listed on the stock market. Of the total, nearly 200 were planning to list and 300 were transforming into public companies while the listings of the rest were stagnant.

Public disclosure of information on finance and operation of SOEs is a top priority, he continued, adding that improved transparency would help enterprises to raise capital at lower costs that banking loans.