Most enterprises required to be transferred to State Capital Investment Corporation (SCIC), the Government’s investment arm, have failed to do so despite the prevailing rules and the Prime Minister’s orders, says a report by the Central Institute for Economic Management (CIEM).

Decree 151/2013/ND-CP of the Government and Circular 118/2014/TT-BTC of the Ministry of Finance require ministries and local governments to transfer State share holdings in enterprises to SCIC.

Besides, the Government has released multiple documents and directives ordering the enforcement of these two legal documents to improve the management of State capital in enterprises.

CIEM vice president Phan Duc Hieu said: “Many ministries, agencies and localities have not actively carried out or even delayed the capital transfer process. They tend to retain such firms or divest capital instead.”

Meanwhile, SCIC does not want to take over struggling businesses, said Hieu at a seminar on the transfer of State capital to SCIC held by CIEM in Hanoi on February 21.

Since 2013, about 234 enterprises have nodded to transfer State capital to SCIC, but only 61 have done so. State capital in the remaining 173 is around VND82.6 trillion, including VND46.9 billion at ministry-governed enterprises and VND60.2 billion at those under local governments, according to CIEM.

There are 32 enterprises under ministries and central agencies, including eight under the Ministry of Industry and Trade, five under the Ministry of Transport, five under the Ministry of Agriculture and Rural Development, 10 under the Ministry of Culture, Sports and Tourism, and four under the Ministry of Health.

Local governments are managing 141 others, with HCMC responsible for 50, Gia Lai 15, Thua Thien-Hue 13, Binh Dinh 11 and Dien Bien seven.

Hieu said many localities and ministries that are managing enterprises did not want to transfer State capital to SCIC. 

Many of them are inclined to hand over ailing enterprises to SCIC while keeping hold of stronger ones. 

“Many localities insist on not transferring healthy businesses to SCIC since they help local development.”

By December 2016 SCIC had received the right to represent State ownership at more than 1,000 companies whose total market cap is VND9.9 trillion (over VND15 trillion in market value), a mere 1% of total State capital at enterprises nationwide.

The number of firms transferred to SCIC that are under special surveillance or making losses account for nearly 7%, said SCIC deputy general director Nguyen Hong Hien.

SGT