National Assembly Chairman: Why does the Law on Property Auction have special privileges for VAMC?

Ms. Nguyen Thi Kim Ngan said that the Law on Property Auction has a provision that a newly established enterprise enjoys "privileges" which is unreasonable.

Reporting on some major issues with different opinions in the draft Law on Asset Auction at the 3rd session of the National Assembly Standing Committee on the afternoon of September 14, Chairman of the Economic Committee Vu Hong Thanh said that some opinions proposed to stipulate a chapter on auctioning bad debts and collateral assets of bad debts, which fully stipulates the principles, order and procedures for handling bad debts to ensure transparency.

There are opinions suggesting that the Government should regulate bad debt auctions because it is believed that specific regulations in the Law are inappropriate and do not ensure flexibility.

The Standing Committee of the Economic Committee believes that, in order to facilitate the auction of bad debts and collateral assets of bad debts that the Vietnam Asset Management Company (VAMC) uses funds from the state budget to purchase, it must be carried out in a convenient order and procedure, in accordance with the practical situation of handling bad debts, but must still comply with the principles and regulations of the Law on Asset Auction, the content of the auction of bad debts and collateral assets of bad debts is stipulated in principle in a number of articles and clauses of the Law and the Government is assigned to guide the order and procedures for auctioning this type of asset.

National Assembly Chairwoman Nguyen Thi Kim Ngan

Chairman of the Nationalities Council Ha Ngoc Chien also expressed concern about the regulation allowing the Vietnam Credit Institutions Asset Management Company to auction itself or sign an asset auction service contract with an asset auction organization to auction bad debts and collateral assets of bad debts that the Company has purchased, because they are state assets, but giving this company the choice is not right. Chairwoman of the National Assembly Nguyen Thi Kim Ngan expressed concern about this regulation: “VAMC buys bad debts from credit institutions. They say they buy, but they account for everything, because there is no money to buy. The debt is “hanging” here. That is, reducing bad debts of bank A, bank B, bank C, but in the end, that reduction is brought back to VAMC. This person has not yet sold it. Now, giving this person the right to auction, I think it does not ensure transparency and clarity. Consider this.”

“It is not reassuring to assign the Government to provide detailed instructions on the procedures for auctioning bad debts and collateral assets of bad debts that VAMC has purchased, and it is also not reassuring to include them in the law. Because VAMC is a new model, even in the world, its effectiveness has not been evaluated or summarized, so it needs to be considered carefully before putting it into law,” Mr. Chien said.

The National Assembly Chairman also analyzed that the Law on Asset Auctions has a provision that a newly established enterprise is entitled to this provision, which is unreasonable. When the bad debt is gone, will it still exist and why is it included in a law? The auctioned assets, including bad debts of asset organizations, do not include the name of that organization.

“Why is there a privilege given to a recently established enterprise, which, as Mr. Chien said, has not been evaluated for its effectiveness or not. And the bad debt is still “hanging” there. I suggest that the Drafting Committee and the reviewing agency study this further, so that when it is at the level of law, all organizations and individuals subject to the application can apply it, not that there is a privilege here.”

Sharing the same view, Chairwoman of the Judiciary Committee Le Thi Nga also suggested considering legalizing the VAMC model. In addition, the 14th National Assembly should also report on the progress of bad debt settlement.

Explaining further on this issue, Minister of Justice Le Thanh Long said that bad debt has recently emerged as an immediate situation of the economy. The Government has a Decree on the organization and establishment of VAMC, and the Ministry of Justice has a Circular guiding the auction of assets. Accordingly, VAMC is given some special features.

“If the law fully regulates the auction of bad debts, it will be quite difficult technically. After discussing with the Economic Committee, there is a regulation in Article 54 on auctioning bad debts and collateral of bad debts that VAMC has purchased.

We would like to receive comments and study them, especially the opinion that the model needs to be summarized, and that if it is not certain, it should not be regulated, especially in the context of considering bad debt as abnormal" - Minister Le Thanh Long said./.

According to VOV