Solution System to Promote and Improve State Management of Enterprise Equitization

It is necessary to improve the financial situation of state-owned enterprises before carrying out equitization, including thoroughly handling outstanding financial problems in the enterprises before determining the enterprise value.

The effectiveness of SOE equitization needs to be demonstrated through a number of criteria:

- Economic efficiency is demonstrated through creating momentum and developing competitiveness;

- Social efficiency is to solve employment, ensure income, improve living standards and qualifications for workers. Create more jobs for young, qualified workers after handling surplus labor due to the impact of the equitization process of state-owned enterprises.

- Financial efficiency is to increase revenue for the city budget, supplement capital and develop GDP.

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3.2.2. About goals and orientation

3.2.2.1. Goals and orientations of the Party and State

Complete the arrangement and equitization of existing SOEs to focus on key industries, fields, important areas, and industries and fields that bring national benefits. Complete the restructuring and equitization of large state-owned corporations and groups, and implement the national strategy on socio-economic development. Implement equitization in which the State holds controlling shares in fundamental industries, natural monopolies, important areas, and essential public services. The State does not hold controlling shares when equitizing SOEs in the fields of providing public services, trade, and investment; enterprises that innovate technology, apply science and technology, proactively integrate, operate effectively in production and business, and are competitive in the region and internationally.

Accelerate the equitization of state-owned enterprises, divestment of capital from non-core businesses, and sale of all state capital in enterprises operating in industries and sectors that the state does not need to hold. This is an important step in restructuring state-owned enterprises, changing the ownership structure and improving corporate governance efficiency, focusing resources on investment and development and implementing the national strategy on socio-economic development.

Early establishment of a ministerial-level agency to perform the function of representing state ownership in enterprises. Apply a modern governance framework and complete a synchronous legal framework to strengthen management, inspection and supervision of state ownership and improve the effectiveness of state management of state-owned enterprises; attract talented staff and ensure autonomy and self-responsibility in production and business of state-owned enterprises.

The organization and operation of state-owned enterprises after equitization must comply with the objective laws of the market economy and comply with trade agreements on the principle of equality with other types of enterprises.

The goal by 2020 is to basically complete the reform of state-owned enterprises, forming a system of modern enterprises with international competitiveness, focusing on development so that by 2020, some enterprises will reach regional level; improve the efficiency of allocation and use of state capital. Build a team of dedicated and visionary entrepreneurs; perfect the management, supervision and anti-corruption system. Enterprises after equitization will focus on key and important industries and fields that bring national benefits. SOEs after equitization will innovate technology, apply science and technology, proactively integrate, have effective production and business activities, and be competitive in the region and internationally.

3.2.2.2. Goals and orientations of Hanoi city

In the period of 2016-2020, the City strives to complete the equitization plan of affiliated SOEs, focusing on guiding enterprises subject to restructuring and equitization to carry out steps according to the process, ensuring work quality and timeliness according to regulations.

The city also requires enterprises to organize and restructure in accordance with their management and supervision capacity, and improve the governance capacity of state-owned enterprises in accordance with international principles and practices; and link the responsibility of the head to the results of the organization and implementation of the enterprise restructuring project to ensure progress and efficiency.

In addition, the City People's Committee also continues to review and supplement the list of enterprises to be restructured and equitized according to the criteria and classification list of State-owned enterprises. The City's state-owned corporations are required to have specific plans to implement the approved restructure and equitization contents.

The city continues to divest state capital in SOEs subject to equitization and in sensitive areas, outside the main production and business lines according to the approved restructuring plan.

3.3. SOLUTION SYSTEM TO PROMOTE AND IMPROVE STATE MANAGEMENT OF ENTERPRISE EQUITIZATION

3.3.1. Group of solutions to create necessary premises for equitization of state-owned enterprises

3.3.1.1. Ideological and propaganda work

It is necessary to strengthen education and training on political qualities, guidelines and policies of the Party and the State for cadres and employees in state-owned enterprises. Party committees at all levels need to periodically review, summarize and evaluate the results of implementing the proposed equitization goals, thereby providing directions and tasks that are realistic for the equitization process of state-owned enterprises in the area in the following period.

It is always necessary to mobilize and do ideological work to get business leaders to agree with the equitization of SOEs. However, this should only be considered as a measure to make the implementation of the State's policy faster and more convenient, but absolutely cannot be considered as a definitive condition that must be ensured before carrying out the equitization of SOEs as it is now. This means that when the professional staff has carefully analyzed, the City's plan on the equitization of SOEs is the ultimate decision for this enterprise, and the management staff as well as the employees and workers of that enterprise must comply.

The propaganda, mobilization, and persuasion to create support for the policy of equitizing state-owned enterprises must first be carried out with the enterprise's management staff, and then deployed to other employees. When doing ideological work and mobilizing employees and management staff, it is necessary to make it clear to them that if these solutions cannot be implemented, the enterprise must also handle it according to other options that are less favorable to them (such as merger, dissolution).

To strengthen propaganda and dissemination, it is necessary to promote the role of mass media such as newspapers, television and information media. It is possible to diversify other forms of propaganda such as: organizing scientific seminars between scientists and business managers, workers on the topics of state-owned enterprise restructuring or exchanging theoretical bases and experiences in other countries. Organizing seminars and interviews between leaders of the City Party Committee and People's Committee with workers interested in the issue of state-owned enterprise restructuring; disseminating policies, answering questions for workers about thoughts and ideas arising from the process of implementing state-owned enterprise restructuring and innovation.

3.3.1.2. Strengthening administrative reform

To successfully implement the equitization of state-owned enterprises, it is necessary to have close direct leadership and direction from Party committees and City authorities at all levels to avoid the situation of

In some places, there is still bureaucracy as at present. In particular, there must be a combination between the City's BDM and PTDN with relevant Departments, branches, and corporations. Specifically, Departments, branches, and corporations need to proactively and promptly provide guidance on policies and implementation orientations, and have a plan to register with the City.

Strengthen and consolidate the role and capacity of the Innovation Board staff and the supporting Working Group, with the following tasks:

- Research issues related to the environment, conditions and requirements for equitization of state-owned enterprises in Hanoi city. Assist enterprises in researching, developing plans and documents for equitization of state-owned enterprises.

- On behalf of the City People's Committee, carry out activities related to the equitization of state-owned enterprises such as inventory, asset classification, enterprise valuation, bookkeeping, and introducing experienced experts to assist or directly undertake enterprise management after equitization.

- Continue to strengthen the role of the Standing Unit specializing in the City's equitization work. The Head of the Unit (01 Deputy Director of the Department of Finance) needs to issue working regulations, assign specific tasks to members; at the same time, carry out weekly, monthly, quarterly and annual reporting. Organize weekly meetings to review the work done in the previous week, develop a work plan for the following week. Regularly urge and guide enterprises in the equitization area to ensure progress and efficiency.

- In case the enterprise cannot organize and renovate itself, it must consult with the City's Management Board and the City's Business Development Department to represent the City People's Committee in presiding over the equitization of state-owned enterprises.

The practice of equitization of SOEs in recent years shows that the role of each Department and sector of the City is not clearly shown, such as: which Department and sector implements first, which Department and sector implements later, and the tasks of each unit. Therefore, based on related policy documents, the thesis would like to propose and specifically define the responsibilities of each Department and sector when implementing equitization of SOEs in the City as follows:

Department of Finance (Corporate Finance Department): As the Standing Committee of the City's Management Board and Enterprise Development Department, the Enterprise Finance Department is a specialized agency, performing State management of enterprise finance, responsible for:

- Check the financial statements of the enterprise up to the time of equitization;

- Guide businesses to prepare documents for handover and receipt of assets, debts, and capital up to the time of equitization;

- Chairing the Working Group to assist the City's Board of Directors and the City's Business Development Department in guiding businesses in developing and appraising financial plans (including handling financial problems);

- Directing enterprises subject to equitization to develop plans: production, business, finance, labor according to the guidance of the sectors; inspecting and urging enterprises in implementing equitization.

Department of Home Affairs: advises on the appointment of the chairman of the board of members, general director, deputy general director, director, deputy director, and chief accountant. The Department of Home Affairs also proactively proposes plans to arrange and assign management staff of the enterprise after equitization.

Department of Planning and Investment: guides enterprises to develop and preside over the appraisal of post-equitization production and business plans, then sends them to the Department of Finance for synthesis.

Department of Labor, War Invalids and Social Affairs: is a specialized agency in the field of labor and employment, so it is assigned to preside over and guide businesses in developing and appraising labor plans (including handling surplus labor), then send them to the Department of Finance for synthesis.

Tax Department: Is a specialized agency that monitors the annual budget collection of enterprises and is responsible for checking the tax settlement of enterprises up to the time of equitization.

Enterprises subject to CPH:

Organize inventory of assets, land, facilities, goods, capital, funds, labor, debts, etc. (with related documents) to hand over in the same condition to the Joint Stock Company according to State regulations.

Prepare financial settlement reports and tax settlement reports at the time of equitization and send them to the Enterprise Finance Department, Tax Department and relevant agencies.

Proactively develop post-equitization production and business plans and labor handling plans to submit to relevant Departments within the prescribed time.

Arrange and reorganize staff and workers according to authority, ensuring stable operations after equitization. Gradually develop production and business according to the plan approved by the City's Board of Directors and Business Development.

City Business Innovation and Development Board: Is a representative body of the City People's Committee responsible for:

- Appraise and approve plans: Production and business after equitization, financial plans, labor handling, initial share issuance. Resolve and propose to the City to handle recommendations from sectors and enterprises.

- Inspect and urge Departments and branches to implement the City's CPH plan.

3.3.1.3. Supplement and complete classification criteria as a basis for developing a plan to equitize state-owned enterprises.

The shortcomings in the review and classification work to develop the plan for equitization of state-owned enterprises according to Decision No. 37/2014/QD-TTg have been presented in Chapter 2. In this part, the thesis recommends the development of additional criteria for classifying state-owned enterprises in the City to arrange these enterprises in the direction of equitization. According to this classification, state-owned enterprises only need to be divided into 3 groups:

Group 1 : State-owned enterprises hold 100% capital.

Based on the reality of Hanoi, it is proposed to add to the list of SOEs that continue to hold 100% of charter capital to operate in sensitive areas: housing management, development and business, housing services. Because these are enterprises that manage the city's large public housing fund in many prime locations.

Group 2: Enterprises when equitized, the State holds more than 50% of shares.

part.

Proposal to put state-owned enterprises into operation in the field of infrastructure exploitation

Railways or maritime security are subject to equitization, there is no need for the State to hold 100% of charter capital to attract capital from other organizations and enterprises to buy shares.

It is proposed to add to this group commercial businesses that own stores and locations in prime locations in the inner city of large centrally-run cities with high land rent differences.

Group 3: The remaining enterprises when equitized, the State holds less than 50% of shares or holds no shares.

It is proposed to put enterprises under Decision 37/2014/QD-TTg operating in road and railway maintenance when equitization is not necessary for the State to hold 75% of shares; State-owned enterprises growing and processing rubber also do not need to have the State hold from 65% to less than 75% of shares. Or the fields of environmental sanitation, lighting, and railway transport that need to attract capital from society do not need to have the State hold more than 50% of shares when implementing equitization. When equitizing these enterprises, the State only needs to hold less than 50% of shares.

The implementation of the classification of existing SOEs in this way demonstrates the will and determination of the Party and State in redefining the position and role of State intervention in the economy as well as the participation of the non-state economic sector in socio-economic activities. This is the idea of promoting internal strength for the development of the whole country in general and the Capital in particular in the context of Vietnam's deep integration into the world economy.

3.3.1.4. Completing the plan for equitization of state-owned enterprises

According to Official Letter No. 2252/TTg-DMDN dated December 29, 2012 of the Government approving the plan to reorganize and innovate 100% state-owned enterprises in Hanoi in the period of 2012-2015, it is necessary to merge 04 urban environmental enterprises in the districts of Gia Lam, Dong Anh, Soc Son, Thanh Tri into the Urban Environment One Member Co., Ltd. Although the City has directed very strongly, the districts and enterprises still have documents expressing their wishes to be equitized. To resolve this issue, we would like to propose to the Government to allow the addition of the above 05 enterprises to the list of equitized enterprises in 2016-2017.

In addition, Hanoi General Production-Import-Export One Member Co., Ltd. (Haprosimex) is subject to equitization, however, the financial situation of the Company in recent years has been very difficult, with prolonged business losses. The management agency has even recommended that the enterprise sell the Knitting Factory and the Wastewater Treatment and Supply Station to partially resolve the loss. This situation leads to the possibility that the enterprise cannot implement the equitization plan. Therefore, the thesis recommends that the City propose and report to the Prime Minister to allow this enterprise to switch to another form of arrangement such as dissolution in 2016.

On the other hand, based on the actual implementation situation in the City and according to the request of the SOEs subject to restructuring, we would like to propose adjusting the equitization plan for the period 2012-2015, switching to equitization with the parent company for the period 2016-2020 for 04 business divisions including:

- Bac Ha Enterprise belongs to Hanoi Agricultural Investment and Development One Member Co., Ltd.

- 03 Hanoi Bus Enterprises, Hoan Kiem Toyota Enterprise, South Hanoi Passenger Car Enterprise belong to Hanoi Transport Corporation.

- Not implementing the equitization of Dong Da Spare Parts Factory under Thong Nhat One Member Co., Ltd. because the Factory has been dissolved.

- Allow to supplement the equitization plan for the Agricultural Service Enterprise under Hanoi Agricultural Investment and Development One Member Co., Ltd. at the request of the parent company.

(Plan for arrangement and equitization of State-owned enterprises in the period 2016-2020 adjusted according to Appendix 3.1).

3.3.1.5. Solutions on organization and human resources of state management

From the reports of the City People's Committee, the author synthesizes and proposes solutions suitable to local characteristics regarding organizational structure as follows:

Add and upgrade functions for the Corporate Finance Department (under the Department of Finance):

Propose to the Government to allow Hanoi city to add functions to the Department of Enterprise Finance (under the Hanoi Department of Finance) as a state administrative agency according to the following two options:

Option 1. Maintain the current name of the Department, add the function of representing the owner of the state capital invested in enterprises according to the provisions of Decree No. 99/2012/ND-CP dated November 15, 2012 of the Government on the assignment and decentralization of the implementation of rights, responsibilities and obligations of the owner of state-owned enterprises and state capital invested in enterprises; including the function of representing the management of state capital when implementing the equitization of state-owned enterprises in the plan until 2020.

Option 2. Allow the City People's Committee to establish a State management agency to uniformly and effectively perform the function of representing the owner of state capital invested in enterprises in accordance with the spirit of Resolution 9 of the Central Committee (9th tenure), Conclusion No. 78-

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