Restructuring State Capital and Investment Corporation in Vietnam

Restructuring State Capital and Investment Corporation in Vietnam (Image from the Internet)

Restructuring State Capital and Investment Corporation in Vietnam

On July 17, 2024, the Prime Minister of Vietnam officially approved the “Plan to rearrange and restructure the State Capital and Investment Corporation until the end of 2025” in Vietnam at Decision 690/QD-TTg.

The restructuring of the State Capital and Investment Corporation aims to ensure a rational structure, promote its leading role as an investment and capital business enterprise according to regulations; implement investment and capital business in enterprises, and projects according to market mechanisms in sectors and fields that the state needs to continue holding control or enterprises and projects in sectors and fields that the state does not continue to hold control in this period but make important contributions to the value chain of SCIC such as technology, market, finance, annual dividend revenue, labor-intensive use, having many land facilities, etc.; at the same time, optimally exploit investment opportunities in the domestic market and gradually expand to the international market.

The restructuring of the State Capital and Investment Corporation is carried out according to the following prominent orientations and solutions:

(1) Regarding business sectors and occupations

SCIC focuses on the following business sectors and occupations:

- Main business sectors and occupations: Investment and management of investment capital as assigned by the Government of Vietnam and the Prime Minister of the Government of Vietnam; Receiving and exercising the rights of state owner representatives in enterprises according to the regulations of the Government of Vietnam; Continuing to rearrange, equitize, and sell state capital in enterprises it has received according to current regulations.

- Business sectors and occupations related to the main business sectors and occupations: Investment and capital business in sectors, fields, enterprises, and projects bringing economic efficiency according to legal regulations; Providing consulting and investment, finance, transformation, management, mergers and acquisitions (M&A) services, and other enterprise support services according to legal regulations.

- Other sectors and occupations assigned by the Government of Vietnam, the Prime Minister of the Government of Vietnam.

(2) Enterprise governance innovation

- Strongly implement reshuffling of enterprise governance, focusing on the following contents:

+ Completing internal management regulations and rules; applying governance on a digital platform.

+ Consolidating the management and executive apparatus, ensuring effectiveness, efficiency, consistent with the scale of capital, labor, technology level, and enterprise assets; promoting internal linkage mechanisms throughout the Corporation.

+ Strongly applying science, technology, and innovation suitable to new conditions.

+ Innovating and improving the efficiency of finance, accounting management; effectively managing labor use, reforming wage mechanisms; developing and enhancing the quality of human resources, especially high-quality human resources.

- Applying international practices in enterprise governance innovation:

+ Gradually implementing corporate governance approaching the principles of the Organization for Economic Cooperation and Development (OECD).

+ Enhancing forecasting work, risk management solutions according to international practices.

(3) Financial, capital, and asset restructuring plans of enterprises

- Creating concentrated financial resources to ensure investment resources in key projects in SCIC's main business sectors; promoting SCIC's leading role in forming, expanding production, supply chains, and value chains. Increasing capital accumulation and concentration through the issuance of shares to increase charter capital in some enterprises in the portfolio to enhance financial resources for investment in large, strategic projects.

- Divesting and equitizing enterprises under SCIC according to approved Decisions; focusing on main business sectors; saving costs, improving the quality of goods and services, prestige, and brand in the market.

- Optimizing resources in terms of capital, land, brand, tradition, history, etc., at enterprises; tightly managing state capital and assets, enterprise assets according to legal conformable.

- Regarding SCIC's charter capital: Implementing the roadmap to increase charter capital according to legal regulations.

(4) Personnel and management organization restructuring plan

- Consolidating the Communist Party organization model - State Capital and Investment Corporation according to the state-owned corporation model and party, and mass organizations in enterprises under the Corporation;

- Enhancing the leadership and supervisory role of party organizations at the Corporation ensuring the principle of Party leadership through party organizations and party members, leading to the implementation of political tasks, and managing officers within the Corporation;

- Reviewing and restructuring the organizational apparatus of units following the orientation of streamlining, reducing focal points, overcoming overlapping of functions and tasks to improve management capacity and business results of enterprises;

(5) Implementation roadmap

- Focusing on reorganizing business production activities to resolve basic difficulties and obstacles (if any) of SCIC and member units by 2025; strongly promoting divestment.

- By 2025: most member enterprises are joint-stock companies, with streamlined organizational models, healthy financial conditions, operating efficiently, with modern technology levels and production techniques equivalent to countries in the region, fully meeting international corporate governance standards; forming a professional management team with high qualifications and good moral qualities.

- Consolidating and developing some large-scale enterprises, operating efficiently, capable of regional and international competition in some of SCIC's main business sectors.

Tran Trong Tin

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