VietNamNet Bridge - The government has been warned that loopholes in the process of divesting state capital from state-owned enterprises may lead to a major losses.

Believing that divestment from large corporations would cause an ‘investment craze’, Nguyen Hoang Hai, deputy chair of the Vietnam Association of Financial Investors (VAFI), warned that quick divestment would cause a loss of up to billions of dollars. 

In the case of Vinamilk, for example, the State may lose up to $1 billion if it implements the capital divestment plan suggested by the State Capital Investment Corporation (SCIC).

Hai said that if the State only sells 20 percent of its capital at Vinamilk, or 9 percent of the company’s charter capital, in the first sales campaign, strategic investors would be kept away from the auctions. 

The plan suggested by SCIC would restrict demand and competition in auctioning, so the selling prices would be low.

“VAFI believes that the plan to sell Vinamilk shares in many different campaigns and sell 20 percent of the state’s capital in the company in the first campaign will cause a loss of $1 billion to the state compared with the plan to sell stakes at once,” Hai said.

The expert said the application of the one-time sale in Vinamilk would not only benefit the state thanks to higher selling prices, but also allow it to get big money at once to implement the north-south high-speed way project. And if the method is applied in a large scale to other enterprises, the State would have huge capital to develop infrastructure projects.

The government has been warned that loopholes in the process of divesting state capital from state-owned enterprises may lead to a major losses.

Dang Quyet Tien, deputy director of the Ministry of Finance’s Enterprise Finance Department, said in order to avoid the state’s capital loss in the equitization process, all enterprises will have to list their shares on the bourse. The listing will show the market prices of shares, to which the state will refer to when valuating enterprises.

In the case of Vinamilk, Tien said it would be better to sell stakes in campaigns because it is still unclear about market consumption.

“It is necessary to explore the market first,” he said. 

When information about the state’s divestment is released, Vinamilk’s share price increases sharply. The company’s share price has soared from below VND100,000 per share to VND140,000.

As for the concern that the disappearance of Vietnamese brands after enterprises are sold to foreign investors, Tien reassured the public that this would not happen if necessary measures are applied. 

He mentioned the concept of ‘golden share’, saying that those who hold ‘golden shares’ will have certain privileges. For example, any decision on changing a company’s brands and products must be approved by the golden shareholders.

Kim Chi