State enterprises called to account

Prime Minister Nguyen Tan Dung has asked the Ministry of Finance to intensify its inspections of State-owned enterprises to make sure they conform with financial regulations.

This is aimed at providing early warnings of financial difficulties.

The ministry was also asked to keep a close eye on investments made by enterprises in their core businesses as well as beyond their spheres of competence in other sectors, including banking, securities, insurance and real estate.

The requests were made in the Government’s recent meeting to review the equitisation of State-owned enterprises, the transformation of the enterprises into one-member liability limited companies, and their performance in the first six months of the year.

The Prime Minister asked the Ministry of Labour, Invalids and Social Affairs to further examine the implementation of working conditions and salary policies in enterprises, and promptly conduct research on a plan to reform salaries and bonuses paid in State-owned groups and corporations before submitting the plan to the Government for approval.

The Ministry of Home Affairs was required to develop the policy of appointing a representative to oversee the State’s share of capital held in State-owned industries, and generally upgrade the quality of enterprise leaders.

To improve efficiency of State-owned enterprises, the Prime Minister urged ministries, authorities, boards of directors and the State Capital Investment Corporation to more strictly oversee the operation of enterprises in which the State contributes capital.

The Steering Committee for Enterprise Renovation and Development will co-operate with ministries and local agencies to develop a plan for State-owned enterprise reform, renovation and classification for the 2011-15 period and submit it to the Government for approval.

The State-owned shipbuilder Viet Nam Shipbuilding Industry Corporation (Vinashin) was recently found to have run up debts of over US$4.2 billion.

Pham Viet Muon, deputy head of the Steering Committee on Enterprises Renovation and Development, attributed Vinashin’s trouble to not only the common difficulties faced by many enterprises due to the state of the international economy, but also to excessive speculative investment in other sectors beyond its core business.

He said: “Vinashin must operate according to the law and use loans responsibly. Vinashin’s management board must review and define their responsibilities.”

Muon noted that after the 2008 crisis, Viet Nam was among several countries that still possessed a stable business environment. From 2005 to 2007, Vinashin signed 166 contracts worth $5-6 billion. It began facing difficulties in 2008 due to the global financial crisis.

Muon also said that the Government must learn from the shipbuilder’s experience to more strictly control State-owned corporations and groups. — VNS

Tags: Vietnam companies, Vietnam enterprises, Vietnam state-owned firms