The Ministry of Finance has said that efforts to equities State-owned enterprises (SOEs) have been hamstrung by a lack of accountability and bottlenecks in defining enterprises’ asset value.

The prime-location land of Viet Nam Feature Filmstudio.

Statistics unveiled at a ministry press conference on Wednesday in Ha Noi showed that 34 SOEs received approval for their equitisation plans in the first nine months of the year, only 11 of which completed the privatisation process.

Dang Quyet Tien, Deputy Director of the ministry’s Agency of Corporate Finance, said these 34 SOEs were valued at a total exceeding VND80.6 trillion (US$3.5 billion). Their charter capital totalled VND25.87 trillion, with the State expecting to hold 43.5 per cent after their privatisation, with 30 per cent sold to strategic investors and the rest to employees, labour unions and through auctions.

Regarding divestments, a total sum of VND15.99 trillion was collected from the divestment of VND3.8 trillion in book value at SOEs.

Tien said that equitisation and divestment remained slow due to a SOEs’ leaders lack of accountability.

In addition, some SOEs had complicated structures, finances and large-scale operations, requiring the participation of capable investors. Thus, they would need time to evaluate their assets and seek investors, he said.

Tien said that the SOEs seemed to be waiting for new equitisation policies to solve all their problems.

According to the agency, a decree on privatising SOEs was being drafted with new points, such as adding book building (share auction method), adjustments of criteria for selecting investors and evaluating land value.

“The new decree is expected to hasten privatisation, promote operation efficiency and prevent losses to State assets at SOEs,” Tien said.

Queries over film studio’s privatisation

Queries over the privatisation of Viet Nam Feature Filmstudio (VFS) featured at the press conference yesterday, including issues related to its brand valuation and the use of its land.

The VFS brand, a 60-year old film studio, was recently valued at zero, which caused a stir.

Tien said yesterday that the equitisation steering board of the Ministry of Culture, Sports and Tourism must verify this value, adding that defining the brand value of VFS was not easy.

Regarding the use of the VFS’s nearly 5,500 square metres of land at a prime location on Thuy Khue Street, Ha Noi, Tien said that the land should not be used to develop high-rise buildings. It should be used for filming purposes, or else, it would be revoked or sold.

VFS was privatised in April 2016 after selling 65 per cent of shares to Vivaso which was backed by Van Cuong Construction United Company at nearly VND33 billion. The film studio has charter capital of VND50 billion, with the State holding 20 per cent.

At a conference on September 21, Deputy Prime Minister Vu Duc Dam called for the entire privatization process of VFS to be inspected to ensure transparency. 

VNS