Ha Thi My Dung, Deputy Auditor General of the State Audit, said that public assets and public finances are subject to the examination and supervision of the State Audit. When necessary, the State Audit will audit enterprises with a state ownership ratio of less than 50 percent.

Since 2015, when the Law on State Audit took effect, the State Audit has conducted the audit and issued six independent audits and 23 audits of affiliated companies. This was integrated with the auditing of finance reports of holding companies – state-owned economic groups and general corporations. 

Mistakes were found and the enterprises were asked to pay VND89 billion more to the state budget. The State Audit also pointed out the shortcomings of the agencies representing state capital.

Nguyen Thu Giang from the State Audit, said the agency in 2009 and 2018 audited Vietsovpetro, a Russia-Vietnam oil and gas joint venture in which the Vietnamese side held 49 percent of capital. The auditing agency found that the joint venture had to pay more to the state budget and applied measures to fix problems. The results were agreed to by both sides.

In 2009, the agency audited the 2008 finance report of FPT JSC, where the state held 7.5 percent of charter capital. The State Audit then proposed an additional payment of VND10.7 billion to the state budget and asked the Da Nang People’s Committee to take back the land or collect a land use fee for the 4,100 sq m of land.

However, according to economist Nguyen Minh Phong, there are two noteworthy problems. First, there exists confusion about the concept of ‘state owned enterprises (SOEs)’. The 2014 Enterprise Law says SOEs are enterprises where the state holds 100 percent of charter capital. Meanwhile, the 2020 Enterprise Law says SOEs are enterprises where the state holds more than 50 percent of charter capital.

The second problem lies in the identification of the community of enterprises in which the state holds less than 50 percent of capital. It is expected that the number of enterprises of this kind will increase sharply as the state ownership ratio in enterprises is decreasing.

“We still don’t have an overview of the community of enterprises in which the state holds less than 50 percent of capital. It is unclear how many enterprises of this kind exists, and the amount of assets, and the capital structure,” Phong said. 

There are enterprises where the state holds only 20 percent of capital, but their charter capital is huge, several trillions of dong, and there are enterprises where the state holds 40 percent of capital, but the total capital is just VND200-300 billion.

Because of the unclear legality, it is difficult to access the enterprises where the state holds less than 50 percent of stake to audit, according to deputy head of the Steering Committee on Enterprise Renovation and Development Nguyen Hong Long.

After a five-year period (2016-2020), there is still no assessment about the state’s assets and land after equitization, as well as technology renovation, laborers and social responsibility at enterprises where the state holds less than a 50 percent stake. 

Long believes this can be done only by the State Audit.

“Less-than-50-percent state owned enterprises have been audited by independent auditors. However, the important thing is checking the state’s capital and assets in the enterprises to find out how they run after equitization,” he explained.

Vu Dinh Anh, a respected economist, noted that enterprises where the state holds less than 50 percent of capital do not belong to any group of enterprises. They are not SOEs and are not private. However, they still must be audited as the task of the State Audit is auditing the entire operation of SOEs as they have relations with public finance and assets.

Giang said that as the legal framework is still weak, the State Audit can just audit parent companies. In many cases, the enterprises have refused to cooperate with the State Audit. 

The State Audit, for example, once planned to audit Vinamilk, where the state holds less than 30 percent of capital, but the enterprise refused the request.

Anh said Vietnam is equitizing enterprises by halves when assigning civil servants and public employees to act as the representatives of the owner (the state) instead of businesspeople.

“We don’t need civil servants in enterprises,” he said.

Ngoc Ha