DIRECTIVE

ON RAPID AND SOUND INTENSIFICATION OF  STATE OWNED ENTERPRISES EQUITISATION

Over the past ten years, SOEs equitisation has been deployed step by step, following the Party's line and resolutions. The Government has concretized the Party's policies, promulgated legal documents, given out comprehensive and appropriate policies, promptly settled outstanding matters during SOEs restructure, equitisation, especially the settlement of outstanding debts and redundant workers. The Ministries, branches, provinces, cities under central authority have been deeply aware of SOEs restructure, equitisation as an focal task, therefore, has actively directed that work with specific programs, measures and have obtained significant results. Equitisation has been further strengthened after the Central Resolution 3 of Term 9, and basically reached the set targets. Through equitisation, state enterprises have transformed into multi-proprietorship, created driving force and dynamic management mechanism; mobilized further social resources for production, business; raised effectiveness, competitiveness and integration capacity. The fact has confirmed that equitisation has become a key solution for restructure, reform of management mechanism and raise of effectiveness for state owned enterprises. 

 However, equitisation progress remains slow, many enterprises still keep 100% of state capital though unnecessary, proportion of shares sold out to the public is low. In several places, people has not fully and unitarily aware of equitisation, hindrances arising during equitisation have not been settled promptly. Several of regulations of state agencies have still been improper, equitisation still requires long time. After transforming into shareholding companies, adequate attention has not been paid to reform of enterprise governance and management method, production and business efficiency of several shareholdings companies are not high. There are few enterprises to list on the bourse.

In order to intensify SOEs equitisation rapidly and soundly following the spirit of Central Resolution 3, especially Central Resolution 9 and Directive 45-CT/TW of the Polite Bureau on restructure, reform, development and raise effectiveness of SOEs, the Prime Minister directs:

1. Ministries, ministerial-level agencies, government agencies, people committees of provinces and cities under central authority, state corporations shall carry out the followings:

a) Continue being aware of and intensifying the dissemination of Resolution of the Party's IX Congress, Central Resolution 3, especially Central Resolution 9 and Directive 45-CT/TW of the Polite Bureau in order to reach higher consensus among levels, branches, staff and party members on the socio-economic development line, requirements, opportunities and challenges in international economic integration; on viewpoints, targets, tasks, solutions to speed up restructure, renovation, development and raise effectiveness of SOEs, of which, equitisation is the most critical step, the basis and important solution for restructure, reform of management mechanism and raise effectiveness of SOEs, stimulate economic growth,  make active contribution to the administration reform process and combating against corruption; at the same time to raise the awareness of implementation of Party's resolutions, the State's laws and administrative rules; seriously implement the Government's regulations, programs, plans on SOEs equitisation.

b) Complete and submit in April 2005 the addition to the overall plan on restructure and reform of SOEs in the spirit of Central Resolution 9 and Decision 155/2004/QD-TTg dated 24 August 2004 of the Prime Minister promulgating the criteria, list of classification of SOEs and independent member companies under state general corporations.

Upon making SOEs restructure and reform plan for 2005 and the following years , it should focus on developing the roadmap for equitisation of state general corporations, excluding the ones operating in security and defence fields or the ones unable to equitise. State general corporations whose most of member companies have been equitised shall carry out the entire corporation equitisation. General corporations that take the important role in the economy shall not equitise the entire corporation immediately, but shall equitise most of their member companies and transform to the form of holding company so that the mother company become the real owner of the state capital invested in subsidiary company. Equitisation of mother company shall be considered carefully after a time of stable operation.

c) The Ministry of Finance shall coordinate with relevant functional agencies to train on, popularize and disseminate the Decree No. 187/2004/ND-CP dated 16 November 2004 of the Government on transformation of SOEs into shareholding companies and other guiding documents to all managing staff of all levels, branches and labourers working in SOEs.

d) Resolutely direct the SOE equitisation following the overall plan approved by Prime Minister. 

Implement the Decree No. 187/2004/ND-CP dated 16 November 2004 of the Government on transformation of SOEs into shareholding companies, ensure the market principles upon SOEs equitisation: enterprises evaluation to be carried out by valuation-functioned organizations; non-implementation of close equitisation within the enterprise; conduction of shares auctions to the public, ...

đ) Based upon the Decision No. 155/2004/QD-TTg of the Prime Minister, review for further sales of state shares in shareholding companies having state capital. Instruct state capital representatives to use the shareholder's right to decide on listing on stock market with regard to shareholding companies qualified for listing.

e) Direct, guide SOEs to settle financial and labour matters prior to equitisation as under current regulations for preventing from delay or non-equitisation due to running out of state capital. In case the enterprises run out of state capital, the forms of sales or bankruptcy are applied.

g) Continue consolidating Committee for Enterprises Reform and Development, ensuring the availability of in-charge division for implementing functions of consultancy, guiding, checking, speeding up the SOEs equitisation.

h) On a monthly basis, the ministries, branches, localities, state general corporations shall assess the results of SOEs restructure, equitisation, review the leaders' responsibilities and propose measures for hindrances settlement. Upon evaluating staff, party members at year end,  it shall include the criteria of implementation results of SOEs restructure, equitisation.

2. Ministries, agencies shall complete mechanisms, policies applicable to enterprises after equitisation; promulgate documents guiding the implementation of Decree 187/2004/ND-CP resolve promptly and effectively any arising matters during implementation.

a) Within April 2005, the Ministry of Natural Resources and Environment shall provide guidelines on procedures for transfer of land leasing contract, grant of land use right certificate when state owned enterprises transform into shareholding companies.

b) Within April 2005, the State Bank of Vietnam shall provide guidelines on outstanding bank loans of equitised state enterprises; inheritance of credit agreements and maintenance of same credit mechanism as the one applied to state enterprises before equitisation; settlement of Risks provision funds upon equitization of commercial banks. 

c) The Ministry of Finance shall:

- Promulgate within March 2005 the Circular providing guidelines for implementation of Decree No. 199/2004/ND-CP dated 03 December 2004  of the Government issuing the regulation on financial management of state enterprises and management of state capital in other enterprises, in which provide the number of representatives and modalities for implementation of rights, obligations of representatives for state capital in other enterprises.

- Organize for the State Capital Investment and Business Corporation to operate soon under Decision of Prime Minister.

- Research, develop policies for encouraging professional organizations to carry out equitisation consultancy, enterprise evaluation, shares investment, forming shares auction centres in big cities, urban centres. Study and supplement the list of securities and auditing companies qualified to implement equitised enterprise evaluation services.

- Study, propose to Prime Minister measures for equitisation of enterprises which are carrying out large-scale investment projects using loans from various sources.

- Preside, coordinate with relevant agencies to select, decide 200 companies for listing on securities markets in 2005.

- Report on operation evaluation of shareholding companies whose shareholders are state enterprises; on sales of enterprises that are not equitised.

- Submit to Prime Minister within quarter II this year the amendments of the Decision 36/2003/QD-TTg dated 11 March 2003 of Prime Minister on promulgation of regulation on capital contribution, shares purchase by foreign investors  in Vietnamese enterprises and Decision 146/2003/QD-TTg  dated 17 July 2003 of the Prime Minister on participation proportion of foreign investors in Vietnam stock market toward permitting foreign investors to purchase shares without restriction and to involve as strategic investors in enterprises not under the list of enterprise subject to investment cap of 30%.  

d) The Ministry of Home Affairs shall provide within quarter II this year the guidelines on arrangement, utilization of equitised enterprises leaders who are not permitted to be appointed as representatives for state capital in shareholding companies.

đ) The Ministry of Labour, War Invalids and Social Affairs shall submit to the Prime Minister within quarter II this year the Regime of responsibility allowance, bonus applicable to representatives of state capital in other enterprises.

e) The Ministry of Planning and Investment:

- Issue within April 2005 the List of business lines, fields to which foreign investors are allowed to finance maximum 30% of capital investment as under regulations of the Law on Encouragement of Domestic Investment; for other lines and fields, no cap of investment level is applied.

- Study, propose to increase capital contribution, shares purchase proportion of foreign investors in Vietnamese enterprises over 30% of the chartered capital with regard to enterprises of several business lines, fields upon compilation of Common Law on Investment.

- Study for amendments of, addition to, building policies for support enterprises through infrastructure development; support post-investment interest; scientific research, technology renovation; training, fostering managing staff and labourers; approach and expand export markets; encourage the application of the best corporate governance; support in provision of information,  new policies... facilitating enterprises to develop, raise competitive capacity after equitisation.

3. Steering Committee for enterprises reform and development shall be responsible to:

- Inspect, speed up, provide guidelines, follow-up and periodically report and to Prime Minister on the equitisation of enterprises of ministries, branches, localities, state general corporations; promptly uncover difficulties, hindrances, irrationalness during equitisation, make proposals to Prime Minister for resolution or to relevant authorities for resolution as according to their competence.

- Contribute comments to Central Party Committee for Organization with regard to guidance on activities of Party organization in shareholding companies.

- Follow-up and make periodical report to Prime Minister on the implementation of this Directive.

 Ministers, Heads of Ministerial level agencies, Heads of Government agencies, Chairmen of People Committees of provinces and cities under central authority, Steering committee for enterprises reform and development, Management Boards of state general corporations shall take responsibility to implement this Directive./.