VietNamNet Bridge - Investors are less interestedin enterprises' strong brandsor valuable machines and equipment, but instead large land plots in advantageous positions. 

The Hanoi Stock Exchange has announced the auction of 19.1 million shares of Hanel, an electronics manufacturer, being held by the State. 

What makes Hanel attractive in the eyes of investors is not only its 30 percent ownership ratio in Daewoo Hotel, one of the best-known 5-star hotels located in the central business district of Ba Dinh,, but also its ‘golden land plots’ in many areas.

In 2015, the Kim Lien Hotel on Dao Duy Anh street in Hanoi wasvsold for a good price not because Kim Lien Hotel had good business performance, but because of the land plot in the central business district where it is located.

Nguyen Duc Thuy, a well-known businessman, spent over VND1 trillion to acquire 52 percent of Kim Lien Hotel’s stake.

Experts have warned about a scenario in which big investors may swallow ‘golden land’ by becoming the shareholders to hold enterprises’ controlling stakes after enterprises are equitized.

Investors are less interestedin enterprises' strong brandsor valuable machines and equipment, but instead large land plots in advantageous positions.

Nguyen Ngoc Dung, member of the HCM City Architects’ Association’s Steering Committee, said that there was lack of transparency in urban development planning in Vietnam. 

Large businesses, by this way or another, can get information about planning from different sources and try to acquire landby buying a stake of an equitized state-owned enterprise(SOEs).

“The State needs to organize the equitization in a transparent way. It is necessary to point out what land is allocated by the State and what land the enterprises buy with their money,” he said.

“If enterprises don’t use the land allocated by the State anymore, they will have to give the land back to the state for auction,” he commented.

The problem lies in the fact that many SOEs received many land plots allocated by the State in the past, when Vietnam was in the subsidized economy. Though Vietnam has become a regulated market economy, the subsidy scheme still exists in the urban development programming and land.

According to Pham Sy Liem, deputy chair of the Vietnam Federation of Civil Engineering Associations (VFCEA), there are two possibilities in the equitization. First, if the land still belongs to the State, the State will have the right to use the land. Second, if the land was transferred to enterprises, they will have the right to sell or use the land as they want. 

Liem warned that land, after equitization, would become land for housing and urban areas. This would make the land much more valuable (at first, the state allocated land to enterprises as land for factories or workshops). 

Dat Viet