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Obstacles remain to equitisation

Update: September, 21/2015 - 09:31

Ngo Minh Hai,  deputy head of the State-owned enterprise (SOE) club of Central Economic Management Institute, told Hai Quan (Customs) newspaper about the equitisation of SOEs in Viet Nam.

With many years of research on SOE, what do you think about the current equitisation of enterprises?

The Government shows strong determination to pursue equitisation, but it still lacks a rule to force enterprises to quickly reform..

Some officials said that the heads of the SOEs who cannot fulfill the task of putting enterprises into equitisation should be disciplined.

However, that's just the speech of some individuals, but it is not the law.

The most important thing is that we have to determine which enterprises should be retained, and those left will be restructured or dissolved.

The current equitisation has not attracted investors because enterprises sell only a small percentage of their capital. What do you think about this?

The equitisation will be meaningless if SOEs still stay as State-owned enterprises after equitisation. Equitised businesses now often sell their shares to officers and employees while shares for investors are not clear, so potential investors are not attracted.

The full advantages of equitisation cannot be promoted if the State remains the biggest shareholder in the enterprises and it still holds the right to make decisions on all the issues related to the enterprises' operation. This will also inhibit the growth of the economy.

We should pay the way for their development after transferring assets to the private economic sector and changing the ownership structure in businesses.

The most important thing is that after equitisation, the leader of the enterprise must be elected by the shareholders.

Who will be the leaders of SOEs after equitisation?

I realise that outsiders are not involved in operating enterprises after privatisation. In many equitised enterprises, the leaders are still appointed by the State with old style management of State-owned enterprises.

We can not apply old style management for the new enterprises. Humans are the main factor. We need good leaders for the new businesses.

Unfortunately with the current mechanism, those who are talented will find it hard to become the head of such companies after restructuring.

Do you think private monopolies will still exist with mass equitisation?

Private monopolies find it hard to exist in a perfect market. Private enterprises have to operate under the rules with healthy competition.

We do have to fear private monopolies if the country has a strict legal system. — VNS

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