VietNamNet Bridge - The State invests in many enterprises as a big shareholder, but it sometimes does not receive dividends from enterprises, even though they make big profits. 

The Ministry of Finance (MOF) has asked the Governor of the State Bank of Vietnam (SBV) to instruct its officials who represent the state’s capital at BIDV and VietinBank to ask the banks’ shareholders to pay 2015 dividends in cash and hand in the money to the state budget.

MOF made the request after BIDV’s shareholders’ meeting decided to pay dividends in shares, while VietinBank decided not to pay dividends to shareholders.

The State now holds the controlling stakes at both BIDV and VietinBank, 95 percent in the former (VND30 trillion) and 64.46 percent in VietinBank (VND 24 trillion).

Nguyen Tri Hieu, a renowned banking expert, commented that MOF might make such a request because of the current budget deficit. If the banks pay dividends in cash, this would help increase the budget’s revenue.

The State invests in many enterprises as a big shareholder, but it sometimes does not receive dividends from enterprises, even though they make big profits.

“In order to change the decision, the banks’ board of directors will have to convene an extraordinary shareholders’ meeting,” Hieu said.

In fact, MOF many times has to struggle hard to demand the dividend payment from the enterprises which it contributes capital to.

In late 2015, MOF and VietsovPetro, an oil & gas joint venture between Vietnam and Russia, argued about the amount of $86 million, or VND2 trillion, the money from oil which was not used up that MOF believed VietsovPetro had to pay to the state.

Meanwhile, VietsovPetro said it did not pay the money to the state budget because the appropriate agencies of the two countries still could not reach an agreement on how to deal with the money.

In 2014, MOF inspected the profit collection at 24 state-owned economic groups and general corporations and found that trillions of dong worth of the state’s profit had not been collected.

The inspectors found that the 24 enterprises invested VND48 trillion in 662 enterprises and got VND8 trillion worth of dividends in 2011-2013, or 5.54 percent a year. However, VND748 billion worth of profit and dividends still has not been collected by June 2014.

Twelve out of 24 enterprises were then found as investing VND7.1 trillion in 48 foreign invested enterprises. However, some of the investments brought loss, or the enterprises did not receive profits.

The Tan Thuan IZ Development Company, for example, contributed 30 percent of capital to the Phu My Hung Development Company which develops the Phu My Hung new urban area. However, Phu My Hung does not share annual profit to Tan Thuan IZ.

H. Duy