VAFI points out 5 mistakes of former Minister Vu Huy Hoang

According to VAFI, Mr. Vu Huy Hoang committed five fundamental mistakes in the management of state capital and assets in enterprises.

Following recommendations from the Ministry of Industry and Trade regarding personnel appointments at Saigon Beer, Alcohol and Beverage Corporation (Sabeco), the Vietnam Association of Financial Investors (VAFI) continues to report on the mistakes of former Minister of Industry and Trade Vu Huy Hoang in the management of state capital and assets in enterprises.

After 9 years since its privatization, Habeco has still not been transferred to SCIC. (Illustrative image: KT)

VAFI stated that during Mr. Vu Huy Hoang's tenure as Minister of Industry and Trade, appointments to key positions in several state-owned corporations and companies did not require extensive experience or management achievements. The leaders of some of these corporations were not individuals who had achieved success and risen through the ranks of the businesses themselves.

"The Chairman of Sabeco, in particular, has virtually no experience in corporate governance or a track record of corporate governance… This is an extremely dangerous issue in the management of state capital and assets in enterprises," a VAFI representative stated.

In particular, in the operational strategies of PVN, EVN, TKV, etc., no board of directors is enthusiastic about the direction of privatizing the entire corporation. Corporations and general companies such as the Vietnam Steel Corporation, the Vietnam Chemical Corporation, and TKV are in a very weak financial position compared to 10 years ago, having to rely on state support or capital injections, as in the case of Ninh Binh Fertilizer Plant, Ha Bac Fertilizer Plant, and Thai Nguyen Iron and Steel Company...

VAFI also stated that it is regrettable that at the Ministry of Industry and Trade, a father appointed his son to a position, whereas even in private enterprises, family businesses, or large private companies, this would never happen.

In another finding, VAFI stated that the Ministry of Industry and Trade, under the leadership of Mr. Vu Huy Hoang, was slow in transferring some privatized enterprises to SCIC for management. "During the nine years under Minister Vu Huy Hoang, Sabeco and Habeco, after nine years of privatization, were still not transferred to SCIC," VAFI pointed out.

The slow pace of equitization and asset transfer within the Ministry of Industry and Trade has led to Prime Minister Nguyen Xuan Phuc's recent criticism at the 2016 mid-year review meeting, where the Ministry's management apparatus was deemed cumbersome and in need of restructuring.

VAFI also stated that many privatized enterprises under the Ministry of Industry and Trade are evading listing. Their representatives are not complying with the Prime Minister's directive. Many privatized enterprises such as Sabeco, Habeco, Vinatex, Petrolimex, and other privatized member units of corporations have refused to list.

Meanwhile, to strongly promote the divestment of state capital and the listing of securities, the Prime Minister stipulated that representatives of state capital owners are responsible for directing their representatives to coordinate and urge enterprises to complete the registration of transactions and listing within a maximum of one year from the effective date of the decision. However, this decision has not led many representatives of state-owned shares at the Ministry of Industry and Trade to comply, with Sabeco and Habeco being two prime examples of companies that have tried every means to evade listing and not comply with the government's directive.

In particular, VAFI observes that under former Minister Vu Huy Hoang, the privatization movement of enterprises declined and stagnated, failing to be as vibrant and active as during the time of Minister Hoang Trung Hai. "While the Ministry of Industry and Trade, which controls many enterprises and is in a favorable business position, saw its privatization movement during the 2010-2015 term lag far behind that of the Ministry of Transport," VAFI assessed.

With the Ministry of Industry and Trade's appointment of Mr. Vu Quang Hai as a member of the Board of Directors and Deputy General Director of Sabeco as the focal point, VAFI asserts that this action by Mr. Vu Huy Hoang and related individuals was entirely self-serving. "This behavior is also strictly prohibited under the 2005 Anti-Corruption Law, specifically Article 10, Point 1 and Article 3, Point 5, which stipulate: Abuse of power for personal gain is strictly prohibited while performing duties," VAFI clearly states.

According to VOV