SCIC charter capital likely to be increased

Update: September, 18/2013 - 08:35

The State Capital Investment Corporation (SCIC)'s charter capital will likely be increased eightfold to US$1.81 billion.— Photo dantri

HA NOI (VNS) — The State Capital Investment Corporation (SCIC)'s charter capital will likely be increased eightfold to VND40 trillion (US$1.81 billion), but the corporation will be dissolved if it loses money for a long time or fails to meet tasks assigned by the State, according to a draft Ministry of Finance regulation.

Under the draft, which was publicised on the finance ministry's website, the Prime Minister will decide whether the corporation is dissolved.

The draft also mentions the rights and responsibilities of members of the SCIC's Membership Council and its leaders. According to the document, members and the general director will be dismissed if they fail to meet assigned tasks and targets or wrongly report the corporation's financial status.

Under the draft, SCIC's primary objectives are to represent the interest of State capital in enterprises and invest in key sectors and essential industries in order to strengthen the dominant role of the State sector.

The corporation is required to oversee profits resulting from State capital invested in the corporation, as well as capital at State-owned firms that the corporation manages.

Senior economist Pham Chi Lan said that the document focused on the corporation's business performance but did not address raising capital. To raise capital, SCIC should sell firms that it managed, she said.

Banking expert Nguyen Tri Hieu said a company that had savings at banks like SCIC would not need much capital. Normally, a company needed capital for business performance but not for depositing at banks, he said.

Previously, SCIC raised concern when it reported that bank deposits accounted for 40 per cent of its revenue in 2012. Out of VND3.89 trillion ($185.7 million) in revenue, VND2.151 trillion ($102.4 million), or 55 per cent, came from dividends.

Interest from the corporation's deposits accounted for up to 40 per cent. Meanwhile, the sale of State capital, supposedly SCIC's main business area, accounted for just 4 per cent of revenue.

However, Dang Quyet Tien, deputy director of the Ministry of Finance's finance department, said that SCIC obeyed the law, saying that savings was a good option to protect State capital if financial conditions were not good. — VNS