With the establishment of a working group on the formation of a special committee responsible for managing State capital at enterprises, Vietnam has taken the first step to realize the plan initiated in 2016.
The government’s Resolution No 1, released on the first day of 2018, mentioned the establishment of a committee in charge of managing the state’s capital at enterprises as an important task that needs to be done this year.
The PM signed a decision to form a working group to boost the formation of the committee led by Deputy PM Vuong Dinh Hue.
However, as Thoi Bao Kinh Te Sai Gon commented, the operation model to be applied to the committee is unclear. Setting up the committee in such a context may cause unnecessary costs to society.
In fact, there are two models for Vietnam’s reference, either one like Temasek in Singapore, or SASAC in China (State-owned Assets Supervision and Administration Commission of the State Council).
The draft plan that MPI (the Ministry of Planning & Investment) previously submitted to the government raised controversy after it was open for ministries’ opinions.
Regarding the model of Temasek, Phan Minh Ngoc, an analyst, commented in a newspaper that the Temasek model is not a suitable solution for Vietnam. To apply the model, Vietnam needs a transparent governance policy, completely independent of political intervention.
The committee will operate purely for commercial purposes which aim to optimize profits from the state’s investment capital and bring optimal added value to shareholders.
Meanwhile, it must not concurrently hold other tasks such as restructuring enterprises, or renovating and upgrading business performance of SOEs.
If so, the key personnel of the committee must be experienced managers, not government officials from ministries and branches.
As for SASAC, which was initially set up in accordance with the Temasek model and has experienced a lot of restructuring, some analysts said this is not a good choice for Vietnam.
The analysts said that Chinese enterprises managed by the committee do not have business performances as good as those of enterprises managed by Temasek.
SASAC manages SOEs without exercising the owner’s right of supervising the operation of enterprises under its management unlike Temasek.
SASAC, for example, owns and manages 100 percent of capital of China Hi-Tech Group Corporation. The corporation has subsidiaries, namely China Garments Co. Ltd and CHTC Helon Co. Ltd. Though SASAC is the ultimate owner, it only supervises the enterprises’ operation through China Hi-Tech.
Source: Kim Chi