VietNamNet Bridge - Many state-owned economic groups that made huge investments in non-core business fields are facing trouble as some of the business tycoons have been jailed because of wrongdoings that caused serious consequences.

The Vietnam National Oil and Gas Group (PetroVietnam), for example, is losing hundreds of billions of dong because of investment in Ocean Bank. 

The bank, which had chartered capital of VND4 trillion, of which PetroVietnam contributed VND800 billion, has been taken over by the State Bank at zero dong. As analysts said, it has been nationalized.

The State Bank’s inspectors later found that the bank’s chartered capital was in the negative category, and the bank could not resolve its problems by itself. 

A report shows that PetroVietnam is also stuck with investments in other businesses, including PetroVietnam Construction JSC, Petrovietnam Petrochemical and Textile Fiber JSC and Green Indochina Development JSC.

Sources said that PetroVietnam has asked for the government’s permission to delay the disinvestment from the three, so that the companies can undergo restructuring before it withdraws capital.

Electricity of Vietnam (EVN), also a giant, also suffered from investments in non-core business fields which accounted for 3.27 percent of the group’s stockholder equity. 

EVN has injected a huge sum of VND2.1 trillion into real estate, insurance, finance and banking sectors.

However, some investment deals could not bring the desired profits. EVN poured VND2.442 trillion into EVN Telecom by December 31, 2010. However, as EVN Telecom continued taking losses, it was transferred to the military telecom group Viettel.

In 2012, EVN committed to withdraw capital from seven companies in non-electricity business fields. By the end of March, EVN had withdrawn all capital from only three real estate firms because of poor performance on the stock market.

The unprofitable investments in non-core business fields is one of the reasons that Vinashin, a former big player in the shipbuilding industry, got bogged down in debts and had to undergo restructuring.

Many other names can be found on the list of the state-owned conglomerates which invested in business fields in which they had little experience. 

The Vietnam Coal and Mineral Industries Group (Vinacomin) has withdrawn capital from six enterprises, but it cannot move ahead with the disinvestment from Hai Ha Economic Zone Development. 

The Vietnam Rubber Group promised to sell its stake in hydropower plants to take back the investment capital. However, it has not been easy to do because of a drop in stock prices recently.

Dr Luu Bich Ho, a renowned economist, said some experts suggested creating a ministry in charge of dealing with state-owned enterprises’ investments or giving more power to the State Capital Investment Corporation (SCIC). However, this has not been approved. 

VNE