In its report to the government on the recent operations of state-owned enterprises, the Ministry of Finance (MOF) stated that these enterprises have fulfilled the roles and tasks assigned by the capital owners, thus contributing to socio-economic development.
They are an important material force for the government to regulate the economy, maintain macroeconomic stability and ensure major economic balances. These enterprises have recorded significant growth and made considerable contributions to the state budget.
Capital of 1.7 quadrillion VND
During the 2015-2022 period, the total state capital invested across 827 enterprises reached 1.7 quadrillion VND (67.2 billion USD), with total revenue of 2.8 quadrillion VND (110.7 billion USD), pre-tax profit of 248 trillion VND (9.8 billion USD), and state budget contributions of 392 trillion VND (15.5 billion USD), mainly from domestic business activities (accounting for 75% of total state budget contributions). Regarding state capital restructuring: 173 enterprises were approved for equitisation with a total value of 443 trillion VND (17.5 billion USD), of which state capital value was 207 trillion VND (8.2 billion USD).
Additionally, Vietnam has divested 25 trillion VND (988.3 million USD) of state capital and state enterprise capital from various units, recovering 172 trillion VND (6.8 billion USD). The proceeds from equitisation and divestment were concentrated in the Enterprise Reorganisation and Development Support Fund to supplement enterprises’ charter capital, and have been subsequently transferred to the state budget to serve medium and long-term investments.
Leading these activities are two state financial enterprises: the State Capital Investment Corporation (SCIC) and the Vietnam Debt and Asset Trading Corporation (DATC). These are two effective state instruments for restructuring, reforming and improving operational efficiency and competitiveness of state-owned enterprises. They help to separate state management functions from state ownership representation functions in enterprises, and transform state capital management from administrative commands to capital investment business, operating on equal terms with enterprises from all economic sectors.
Currently, SCIC is the only enterprise with the functions and duties of a professional state capital investment organisation. Accordingly, the state invests capital and focuses on consolidating and building a strong SCIC to ensure sufficient financial resources as well as centralised management to implement capital investment business tasks and invest in and develop large-scale, important investment projects, and manage and direct the development of subsidiary companies.
Evaluating SCIC’s business performance, MOF leaders noted that SCIC’s key indicators have shown continuous growth, with each year surpassing the previous one.
SCIC has taken over 1,080 enterprises with total state capital of more than 32.339 trillion VND (1.3 billion USD); attracted and invited foreign investors to participate as strategic shareholders in several large enterprises.
Additionally, capital divestment activities in 1,054 enterprises have recovered 51.668 trillion VND (2 billion USD), 4.1 times the cost value. Disbursed capital reached 38.779 trillion VND (1.5 billion USD), with state budget contributions of 92.823 trillion VND (3.7 billion USD), and an average return on equity of 13% per year.
In 2023, SCIC’s revenue increased 52 times compared to that at its establishment, while after-tax profit increased 72 times, owner’s equity increased 17 times, and total assets increased 12 times.
DATC is also an enterprise operating under the model of using state capital for business, participating in state enterprise restructuring through debt trading and handling in accordance with market mechanisms, while simultaneously restructuring to restore enterprises.
As of the end of 2022, DATC’s total debt purchase turnover reached more than 16.4 trillion VND (648.4 million USD), total revenue exceeded 18 trillion VND (711.6 million USD), and pre-tax profit surpassed 3.3 trillion VND (130.4 million USD).
Business operations have shown strong growth with annual revenue increasing from 450-550 billion VND to 1,500-2,000 billion VND, and annual pre-tax profit rising from 120-150 billion VND to 200-350 billion VND, generating economic and financial benefits for the state budget and the economy.
Comprehensive restructuring of state capital
In evaluating the performance of state-invested enterprises, the MOF reported that in recent years, these enterprises have fundamentally undergone comprehensive restructuring.
They have fulfilled their roles and tasks as assigned capital owners, contributing to socio-economic development and serving as an important material force for the state to regulate the economy, maintain macroeconomic stability, and ensure major economic balances. They have recorded significant growth and made substantial contributions to the state budget.
Furthermore, state-invested enterprises continue to perform their duties in providing public goods and services such as energy, infrastructure, and telecommunications services, and have also leveraged their strengths in the market economy.
The scope of state capital investment in enterprises has recently narrowed, becoming less overdiversified and more focused. Additionally, this capital source has been consistently restructured to align with practical needs; the rights and responsibilities of state ownership representatives have begun to be functionally separated.
As a result, equitisation, capital divestment and restructuring have shown positive progress, creating foundations for stock market development. Most groups and corporations are operating profitably, making significant contributions to the state budget and have established a stable, long-term mechanism for state budget revenue.
However, the process of managing state investment capital in enterprises reveals many obstacles that need to be reviewed, adjusted and resolved. According to SCIC Chairman Nguyen Chi Thanh, even state capital investment enterprises like the SCIC face difficulties regarding capital utilisation mechanisms.
Meanwhile, DATC Deputy General Director Nguyen Danh Dung assessed that for the 2026-2030 period, the DATC will develop under a parent-subsidiary model with 100% state ownership, and after 2030, it will proceed with equitisation to become a multi-ownership financial institution with the state maintaining controlling ownership.
Accordingly, DATC will expand its scope of operations to all types of debts and assets; broaden its business targets, industries and supplementary service activities. Therefore, DATC needs to be strengthened in terms of both legal framework and financial resources.
In assessing the shortcomings in current state capital management in enterprises, the MOF notes that even within the state financial management apparatus, there remains a view that equates the capital and assets of state-invested enterprises with state capital and assets. The state should manage the portion of state capital invested in enterprises, not manage enterprises based on individual assets that owners contribute as charter capital, as the state has transferred ownership rights to the enterprises.
Additionally, there are issues with ensuring “harmonious benefits and shared risks” in the restructuring of state capital in enterprises. There are legal gaps leading to oversight in the management and supervision of state capital use in enterprises under functional agencies. There are also other issues such as resources and capital investment processes, guidance and management of benefits derived from state capital investment, the approval process for investment policies, and forms and scope of state capital investment.
According to Deputy Minister of Finance Cao Anh Tuan, this is primarily due to outdated legal regulations compared to newly issued institutions. In implementation, some relevant organisations and individuals still have misconceptions or lack awareness in complying with legal regulations regarding the management and use of state capital invested in business production at enterprises.
Therefore, the challenge in tightly managing state investment capital in enterprises today requires a quick upgrade of the legal framework for this task in a concise, easily understandable, and implementable manner. Only with a sufficiently robust legal framework can we truly provide a solid foundation for state investment capital in enterprises to be effective and bring about practical results.
