Solutions for speeding up equitization and divestment of State capital in enterprises

RESOLUTION
Solutions for speeding up equitization and divestment of State capital in enterprises

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001.

Pursuant to Conclusion No. 50 KL/TW dated October 29, 2012 adopted by the Party Central Committee  regarding the Project on restructuring, reforming and enhancing operational efficiency of SOEs; 

At the request of the Minister of Finance;

HEREBY DECIDED

Article 1. The Ministries, the People’s Committees of Centrally-run provinces and cities, the Board of Directors of State-run economic groups and corporations, the Board of Directors and CEOs of State-run enterprises are assigned:

1. To fully grasp and disseminate the Party's  resolutions and  conclusions on continuing restructuring, reforming, developing and enhancing operational efficiency of SOEs (the Resolutions of the Party Central Committee's 3rd and 9th meetings -9th tenure , Conclusion No. 50 – KL/TW dated October 29, 2012 of the Party Central Committee) and Decision No. 929/QD-TTg dated July 17, 2012 by the Prime Minister approving the Project on “SOEs restructuring, focusing on State-owned economic groups, corporations in the period 2011- 2015” (hereinafter referred to as Decision No. 929/QD – TTg).

2. Based on the Project on restructuring in the period 2011 – 2015 approved by competent authorities, direct enterprises under their management:

a) Building up the plan and schedule of equitization (including timing for each stage) and submitting them to competent authorities in charge of equitization for approval. 

b) Building up the plan and schedule of withdrawing non-core investment capital (except for special cases decided by the Prime Minister) and submitting them to the competent authorities for approving the implementation in the direction:

- To conform with the approved Project on restructuring and the criteria and classification of State-owned enterprises under the Prime Minister's Decision, divestment must be completed before December 31,2015;

- To conform with market principles in an open, transparent and effective manner. For investments which are unable to be fully recovered to book value, provisions for loss investments must be set aside, diminution in financial investment must be undertaken in compliance with current regulations and divestment plans must be outlined and submitted to competent authorities for approval in compliance with Decree No. 26/NQ – CP dated July 9, 2012 of the Government.

Article 2. In case the equitization and State capital withdrawal can not be completed as specified in plans approved by competent authorities, the Board of Directors of State economic groups and corporations, the Board of Directors and CEOs of State-run enterprises and the management boards of enterprises are obliged to define objective and subjective reasons, determine obligations of related collectives and individuals and report competent authorities for consideration and handling as regulated. Concurrently, the Ministers, Heads of Ministerial-level agencies, Chairmen of People’s Committees of Centrally-run provinces and cities shall be responsible to the Government, the Prime Minister for the delay of the approved plans.

Article 3. For divestment from non-core business and production under the Project on restructuring approved by competent authorities, State-run economic groups, corporations, and enterprises, in addition to Decree No. 71/2013/ND-CP dated July 11, 2013 of the Government regarding State capital investment in enterprises and financial management in the enterprises where 100% charter capital is held by the State, are allowed  to carry out the following solutions:

1. Withdrawing capital shares in other enterprises under par value or book value after setting aside provisions for losses of financial investments as regulated basing on the capital withdrawal plan decided and approved by the owner.

2. Regarding the transfer of investments in unlisted joint stock companies having investments valued at VND10 billion or more at par value, enterprises may hire intermediary financial institution (securities companies) to auction or organize auction at their own enterprises. In case of unsuccessful auction, enterprises are obliged to report the owner for considering and deciding on capital amount purchase in consensus.

3. Making initial public offering of shares invested by State-run enterprises in public companies involved in production and business activities, which:

a. Suffer from losses in the year just gone before the year of registering initial public offering and have accumulative losses by the year of registering initial public offering.

b. Suffer from losses in the year just gone before the year of registering initial public offering but decumulate any losses by the year of registering initial public offering.

c. Make profits in the year just gone before the year of registering initial public offering and suffer from accumulative losses by the year of registering initial public offering.

4. For capital withdrawal from financial companies, and commercial banks of State-run groups and corporation, State-run commercial banks may be designated to purchase or the State Bank of Viet Nam may act as the representative of the owner.

The ministries, sectors and localities are obliged to review and transfer the equitized enterprises to the State Capital and Investment Corporation (SCIC) as specified in Decree No. 151/2013/ND – CP dated November 01, 2013 of the Government regarding SCIC's functions, tasks and operational structure.

Article 4. SCIC is assigned to make consideration and acquire investments outside core business lines,

State-run economic groups and corporations, 100% State-owned companies engaged in insurance and banking in case of unsuccessful divestment after fully taking all measures mentioned herein. The buying price is based on market prices, but not exceeding book value and deducting the provisions for diminution in value of investments which have been fully set aside as regulated. State-run economic groups, corporations and enterprises shall be responsible for making report to SCIC for considering the acquisition of such investments.

At the time when the investments are transferred to SCIC by State-run groups, corporations and enterprises when provisions for losses of financial investments are yet set aside or fully set aside, State-run groups, corporations and enterprises are obliged to put aside such provisions as regulated.

Article 5. The Ministries overseeing sectors, provincial and municipal People’s Committees, State Bank of Viet Nam, and SCIC shall, basing on the criteria for classifying enterprises under the Prime Minister's Decision and the Project on SOEs restructuring, make plans of State capital divestment in enterprises where they represent as the owner and submit to the Ministry of Finance and the SOE Reform and Development Steering Committee for assembling and reporting the Prime Minister for making consideration and decision according to the principles:

1. State-run groups, corporations, and enterprises shall base on the criteria for classifying enterprises and the role of groups and corporation on a sector’s development to determine the holding ratio of State capital which is not more than 65% of charter capital.

2. Bao Viet and commercial joint stock banks maintain the controlling ratio held by State which is not less than 65% of charter capital (except for VietinBank).

3. In case State-run economic groups, corporations, and enterprises having the State capital ratio in enterprises approved by the competent authorities under Decision No. 929/QD-TTg, they have to follow the approved decision. After 2015, State-run economic groups, corporations and enterprises are obliged to submit to the competent authorities for adjustments of their State capital ratio in compliance with Clauses 1 and 2 hereof and the criteria for classifying enterprises under the Prime Minister's Decision.
Article 6. Implementation

1. The Ministry of Finance is obliged:

a. To submit to the Prime Minister a draft Decision for effective implementation of this Resolution.

b. To coordinate with orher ministries, sectors, the People’s Committees of Centrally-run provinces and cities, State-run groups, corporations and enterprises to provide guidance, supervise and inspect the equitization and State capital withdrawal in enterprises, promptly make proposals to deal with any problem that may arise.

2. The Ministers, Heads of the Ministerial-level agencies, Chairmen of the People’s Committees of Centrally-run provinces and cities, the Board of Directors of State-owned groups, corporations and enterprises shall be responsible for:

a. Focusing on directing the implementation of solutions for speeding up the equitization and State capital divestment at enterprises under this Resolution.

b. Quarterly reporting to the Prime Minister on the results of the Project on restructuring State-owned economic groups, corporations (focusing on equitization and capital withdrawal) and submitting to the Ministry of Finance for finalizing documents and reporting the Prime Minister.

3. The Minister of Planning and Investment, the Minister of Home Affairs, the Minister of Labor, Invalids and Social Affairs take the prime responsibility and cooperate with the Ministry in charge of the sector, the Ministry of Finance to implement the tasks under their management as mentioned herein.

4. The SOE Reform and Development Steering Committee provides assistance to the Prime Minister to direct the ministries, sectors and localities, State-owned economic groups, corporations to speed up the equitization, State capital withdrawal until 2015; quarterly report the Prime Minister on the implementation. /.

ON BEHALF OF THE GOVERNMENT

PRIME MINISTER

(Signed)

Nguyen Tan Dung