Home » Business » Gov’t gets tough on State business equitisation

Gov’t gets tough on State business equitisationPrime Minister Nguyen Tan Dung has asked leading economic groups and State corporations to accelerate the equitisation process to improve its operational efficiency.

The Government leader’s request came after reports that the restructuring of State-owned enterprises (SOEs), including leading economic groups and State corporations is going slower than expected.

He asked the designated corporations and groups to focus on core business, divest from non-core areas and reduce State capital in equitised businesses.

The economic slowdown has taken its toll on all economic sectors, and the State economic sector is no exception. A number of major SOEs, including economic groups and corporations, have faced financial losses after pouring huge investment into non-core business areas. Consequently, divesture from the non-core areas is a must.

The PM requested that the economic groups and corporations clarify the responsibility of managers for financial losses, and restructure their capital and assets to reduce waste and free up additional capital for key projects and prevent waste.

“Divestment is a must, but the process requires cautious steps to prevent any unhealthy effects,” said Dung.

He also required the SOEs to promote the transparency in their financial operations, in addition to enhancing their governance and finalizing institutions.

“SOEs must make public the results of their operations to enable consensus in society,” said the government leader.

“They need to develop appropriate business strategies by reexamining their functions and core business areas, as well as investing in technology renovation in order to increase the economic value of end products and services,” said the PM

Dung acknowledged SOE efforts in maintaining production in the context of the global economic slowdown and confirmed that they are still the mainstay of the national economy.

In 2012 the designated economic groups and corporations earned a total of VND1,621 trillion in revenue, or 92 percent of their annual set target. Their pre-tax profit came in at VND127 trillion, down 5 percent against 2011.

Businesses that attained high revenue included those working in the oil& gas, electricity, petroleum, military-run telecommunications, post and telecommunications, aviation, and coal and mineral ores industries.


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