Many state-owned enterprises (SOEs) could be soon forced to reduce holdings in their strategic firms.
A draft Finance Ministry circular guiding Decree No. 09/2009/ND-CP of February 5, 2009, promulgating the Regulation on financial management of state companies and management of state capital invested in other enterprises, stipulates that state-owned enterprises must use at least 70 per cent of their total investment capital in affiliated companies within sectors of their core business.
In addition, SOEs would not be allowed to spend more than their charter capital on non-core businesses. In banking, securities and insurance areas, SOEs would be entitled to buy a maximum 20% charter capital stake in only one enterprise of these sectors each. In special cases, the stake could rise to 30 per cent.
Statistics from the National Assembly’s SOE capital management supervision delegation discovered that SOEs had invested over VND 21 trillion in banks, securities and insurance companies by late 2008, up 3.3 times against late 2006.-