State Capital Investment Corporation (SCIC), the Vietnamese government’s investment arm, and MobiFone Corporation have joined the list of major state-run companies handed over to the recently-launched Commission for the Management of State Capital (CMSC), dubbed as “super committee”.

The Ministry of Finance on November 12 handed over SCIC to the CMSC. As of June 2018, SCIC’s charter capital stood at VND50 trillion (US$2.14 billion), while its total asset value reached VND41.7 trillion (US$1.78 billion). 

SCIC’s main task is to represent the interests of state-owned capital in enterprises and invest in key sectors and essential industries.

Commencing operations since August 2006, SCIC is currently managing a large portfolio of over 500 enterprises that are operating in various sectors, such as financial service, energy, manufacturing, telecommunications, transportation, among others and has an investment portfolio of nearly US$5.7 billion as of June 30, 2018. 

On the same day, the Ministry of Information and Communication (MIC) also handed over Vietnam Posts and Telecommunications Group (VNPT) and MobiFone Corporation to the CMSC. The two companies in subject have a combined asset value of VND128 trillion (US$5.48 billion) and equity VND87.2 trillion (US$3.73 billion). Of the total, VNPT’s equity stood at VND72.2 trillion (US$3.09 billion) and MobiFone's VND15 trillion (US$642.33 million). 

Minister of Information and Communications Nguyen Manh Hung said the transfer of Vietnam’s major SOEs to the commission is a necessary move in improving the corporate governance of state firms, which could be achieved by removing the function of representing State ownership at enterprises from state administrative management agencies. 

The move would improve efficiency in SOEs’ operation, said Hung, adding that the MIC will continue to create favorable conditions in terms of legal environments for the development of IT companies.

Five state-run corporations under the management of the Ministry of Transport also completed the hand-over process to the CMSC. They are Airports Corporation of Vietnam (ACV), Vietnam Airlines, Vietnam Railways, Vietnam National Shipping Lines (Vinalines) and Vietnam Expressway Corporation (VEC). 

Total charter capital of five corporations reaches VND49 trillion (US$2.1 billion), of which state capital accounts for over VND46 trillion (US$1.97 billion). 

Two days earlier, the CMSC took over six major firms from the Ministry of Industry and Trade, including Vietnam Oil and Gas Group (PetroVietnam), Vietnam Electricity (EVN), Vietnam National Coal and Minerals Group (Vinacomin), Vietnam National Chemical Group (Vinachem), Vietnam National Petroleum Group (Petrolimex), and Vietnam National Tobacco Corporation (Vinataba). 

Those six firms have a combined state capital of VND555 trillion (US$23.75 billion), accounting for around half of the total state capital of 19 state-owned corporations under the management of the CMSC. 

At the launching ceremony of the commission on September 30, Prime Minister Nguyen Xuan Phuc said the CMSC is aimed to improve efficiency of state-owned enterprises (SOEs), in turn providing greater competitiveness for the economy.

The CMSC is scheduled to take over the role of state capital representative at 19 leading state-run groups and corporations, which manage a combined capital of VND1,000 trillion (US$43.02 billion) and assets of over VND2,300 trillion (US$98.96 billion), Phuc added. 

Those corporations in subject play an essential role in Vietnam's economy, holding two-thirds of total state capital, stressed the PM. 

Phuc requested the CMSC to complete its preparation and prevent possible loopholes for economic malfeasance, while focusing on applying information and technologies in operation. 

Key tasks of the commission included management of state capital; financial supervision and efficiency evaluation; appraisal of projects and investment activities; risk management and regulating working mechanism for state representatives at SOEs.

Hanoitimes