EVN banned from investing in property, banking sectors

Update: February, 14/2017 - 18:00
Electricity of Viet Nam (EVN) is not permitted to mobilise capital to invest in the real estate, finance, securities and insurance companies, venture and investment funds sectors. — Photo
Viet Nam News

HÀ NỘI — Electricity of Việt Nam (EVN) is not permitted to mobilise capital to invest in the real estate and finance sectors.

It cannot contribute capital to or invest in real estate projects or buy shares of banks, securities and insurance companies, venture and investment funds.

The Government has promulgated Decree No 10/2017/NĐ-CP providing a financial management mechanism for EVN, stipulating the use of State capital at the group, its mobilised capital and other sources of funding it manages for lawful business operations.

The group is responsible for controlling capital use and developing capital sources effectively for its production and trading. It should report to the Finance Ministry on its losses and debts which cannot be paid or other violations to have supervision under the laws and regulations.

EVN can raise funds from international and local organisations and individuals to meet its capital demands. It is required to take full responsibility over capital use and debt.

Under the decision, EVN should maintain the debt on equity ratio on its quarterly or yearly financial reports at the time of the latest capital mobilisation not exceeding three times, including guarantee over loans made by its affiliates and associated firms.

EVN is allowed to mobilise capital by issuing corporate bonds, borrowing loans from credit institutions and other financial organisations and labourers.

The decree also stipulates that EVN can use its capital to invest in businesses which are allowed in its operation regulations. The investment must follow regulations, ensure effectiveness, increasing income and not change its operation targets.

However, the group is not allowed to receive capital from subsidiaries.

Its investment abroad should follow requirements on the use of capital and assets under the Law on Management and Usage of the State capital on production and trading, the regulations on investment, foreign currency management and other related laws.

The decree will take effect from the beginning of April. — VNS