Time of Equitization.

Noi increased from 102- 2,000 million VND (1,960.8%) and Hoai Duc Agricultural Machinery Joint Stock Company increased from 43- 1,900 million VND (increased by 4,418.6%).

After equitization, most enterprises operate more effectively, thus attracting a large amount of capital for investment in production and business development. As of December 30, 2015, the total charter capital of equitized companies was VND 5,414.6 billion, an average of VND 26.3 billion per enterprise, compared to the additional mobilized state capital of VND 2,345.8 billion.

About revenue, profit, budget payment :

The results from 189 JSCs after 1 year of equitization were 12,605,444 million VND (an increase of 138.5% compared to the time before equitization) , of which only 43 companies had a decrease in revenue, 02 companies had the same revenue as before equitization and up to 144 companies had an increase in revenue. Typically, Urban Traffic Construction JSC had revenue increasing from 1,731 to 28,667 million VND (an increase of 1,656%) or Shipbuilding JSC had revenue increasing from 1,099 to

83,354 million VND (7,584.5%).

According to the report data from 183 joint stock companies, the production and business results after 1 year of equitization are as follows:

- Total revenue reached 12,953,884 million VND, up 48.84% compared to the time of equitization.

- Budget contribution reached 667,200 million VND, up 72.94%;

- Pre-tax profit reached 436,527 million VND, an increase of 119.64%; among them, Hanoi Housing Materials and Construction Joint Stock Company No. 28 went from a loss of -1,478 million to a profit of 517 million; or Hanoi Housing Investment and Development Joint Stock Company No. 22 went from a loss of -1,012 million to a profit of 985 million VND [98, p.3].

About labor and income :

- The average total number of employees is 35,116 people, a decrease of 20.5% (in fact, when completing the equitization, the average number of employees decreased by 40.64%. After operating in the form of a joint stock company, the enterprise recruited a number of new employees with more professional qualifications and training) [98, p.4].

- Average income of workers has increased compared to the time of equitization.

When comparing the first year of equitization with the last year of the SOE model, many clear changes were seen, including businesses that had been operating at a loss in previous years.

This shows that in the first year of equitization, the transition to the new model has not had an immediate, sudden impact on factors directly related to revenue such as increased productivity and product consumption of the enterprise, but has had a strong impact on indicators that reflect operational efficiency such as profit and profit margin.

Building on the growth momentum of the first year, in the following years the growth rate of business indicators continued to be maintained throughout the operation process under the JSC model.

After equitization, the majority of employees in the enterprise become shareholders, the board of directors and the executive apparatus are all selected, most of the members are those who own a large number of shares, have interests closely linked to the enterprise, making the management method change profoundly. To improve operational efficiency and have dividends to distribute to shareholders, enterprises have applied many measures such as: reviewing, reasonably rearranging the workforce, saving costs (direct, indirect); increasing revenue, adjusting salary and bonus policies appropriately in the direction of distribution according to labor productivity and work efficiency... therefore, labor productivity and product quality have increased significantly.

(Compare charter capital, revenue, profit, total budget payment at enterprises before and after equitization according to Appendices 2.1, 2.2, 2.3, 2.4

Source: Report of the City People's Committee).

Equitization creates a multi-ownership enterprise

After equitization, due to the issuance of additional shares to implement new production and business plans, the operating capital of enterprises increased. The equitization process attracted 442.4 billion VND from employees and investors, accounting for 66.2% of charter capital (data up to 2015 of the City's Board of Directors and Economic Development) [98, p.5].

Because the goal of equitization is to create a type of enterprise with many owners, including the participation of a large number of employees, it will increase the supervision of investors over the enterprise's capital, improve the efficiency of capital use, and change the management style to ensure the harmonious settlement of the interests of the State, enterprises, investors and employees.

The implementation of SOE equitization has allowed enterprises to attract a large amount of idle capital in society to invest in production development through the stock market. With 316 SOEs equitized as of December 30, 2015, there were 4,841 billion VND.

With the shares sold, the City had 2,869 billion VND (accounting for 53% of the total equitized state capital) to reinvest in economic development [72, p.8].

On the other hand, the increase in charter capital of enterprises after equitization has shown that equitization has really opened the door for enterprises to access a new "channel" of capital to meet development needs. The participation of the investing public in auctions on the Hanoi Stock Exchange shows that not only employees working at the auctioned companies but also people are quite interested in investing and trading stocks and bonds. By the end of December 2015, the Stock Exchange had auctioned 385 sessions for equitized SOEs or joint stock companies to sell part of their state capital. The total value of winning shares reached 3,239.2 billion VND, with 4,751 winning investors out of 7,675 total investors registering for the auction [98, p.8].

(Comparison of overview of State-owned enterprises in the City before and after equitization according to Appendix 2.5 - Source: author's synthesis).

Equitization of state-owned enterprises brings social benefits

In a survey of 60 enterprises that had been equitized for more than 1 year by the Hanoi Institute for Socio-Economic Development in 2015, it was shown that labor productivity increased by an average of 18.3%; average enterprise salary increased by 11.4%. This confirms that the effectiveness of converting SOEs into JSCs has had a strong impact on the performance of enterprises.

The work of resolving surplus labor has also achieved certain successes. Since the promulgation of Decree 41/2002/ND-CP, the problem of surplus labor has been resolved more satisfactorily, on the one hand creating a more positive mentality for unemployed workers, on the other hand encouraging enterprises to quickly carry out the arrangement work. By the end of 2015, the Surplus Labor Support Fund had provided support to 380 enterprises to resolve the problem of 14,480 surplus workers with an amount of 770 billion VND [72, p.6].

2.3.2.3. Limitations

Equitization has had initial success but is still slow.

The overall result compared to the equitization plan approved by the Prime Minister has only reached 80%. The number of equitized enterprises in some years has reached a positive number but compared to the plan's requirements, it has not been achieved.

Besides some departments, branches and corporations that have attached importance to the work of equitization, some units are still hesitant and waiting, only talking about difficulties and obstacles, but few organizations study and research experiences in places that have done well to explain, persuade and direct SOEs subject to equitization to implement.

The time to carry out equitization is still long.

According to the results collected by the Hanoi Department of Enterprise Finance at 234 equitized enterprises, the time to equitize an enterprise has been reduced from 512 days (in 2001) to 236 days (in 2015).

The equitization process is divided into the following stages:

STT

Job Description	Actual number of days presently
1	Establishment of the Steering Committee for Business Innovation – Start Valuation	17 days
2	Start Valuation - Decide on the Value of Your Business	36 days
3	Decide on enterprise value, approve equitization plan	60 days
4	Approval of equitization plan - start selling shares	24 days
5	Start selling shares – complete selling shares	48 days
6	Completed sale of shares - shareholders meeting	25 days
7	Shareholders meeting - business registration	26 days
	Total	236 days

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Table 2.8 - Time to conduct equitization.

Source: Author's synthesis from reports of Hanoi People's Committee.

However, compared to the latest regulations on equitization, which states that the equitization process can only take a maximum of 6 months, or 180 days, the above time is still long.

(Diagram describing the equitization process of state-owned enterprises in Hanoi city)

according to Appendix 2.6 - Source: compiled from the report of the City People's Committee).

The state still holds many controlling shares.

Converting to a joint stock company, the enterprise becomes multi-owned in terms of capital; according to the aggregated data of 189 joint stock companies at the time of equitization, there are 23.8% of enterprises in which the State holds more than 50% of capital; 42% of state-owned enterprises hold less than 50% of capital and only 34.2% of state-owned joint stock companies do not hold capital [98, p.4].

This shows that despite equitization, in many enterprises, the State is still the largest shareholder, and at the same time many joint stock companies established in this way are

The State holds controlling shares. It is worth mentioning that the proportion of charter capital that the State still holds in JSCs has not decreased but is increasing. If in the early period (1992-1998), the proportion of shares that the State holds in JSCs was 28%, then in the period 2010-2013, this proportion increased to 46.8%. Currently, the average is 41.5%. This proportion is hindering the development of many enterprises after equitization [98, p.5].

Through the reality of share auction activities, it is shown that investors are not only interested in business results or the potential for business development but also pay attention to the possibility of changing the management method. They are not very interested in enterprises in which the state holds a large portion of capital.

Joint stock companies are discriminated against

There are a number of incentive policies to facilitate the development of SOEs after equitization to become joint stock companies. The rate of 87% of enterprises with better operating results than before equitization is partly due to these policies [98, p.3]. However, in reality, joint stock companies are subject to many discriminations. The most obvious discrimination is in areas related to banking, finance, land policy and tax, etc.

According to the reflection of enterprises, after equitization, the land area and factories have not changed much. Enterprises even continue to receive support from the City through land lease and land allocation at low prices. However, due to the lack of clarity on land use rights and the failure to completely resolve land obligations when switching to the JSC model, enterprises have encountered many difficulties in arranging business plans. Many enterprises, when wanting to invest in building factories or contributing capital to joint ventures with assets on land, have encountered difficulties because the land policy for JSCs is unclear. This has led to situations such as: member units of the corporation have been equitized but do not have land use rights, cannot be registered in the name of the corporation to lease land, or allocate land, because the land belongs to the right to use and is registered in the name of the corporation. Therefore, when needed, they have to ask the corporation to borrow from the bank, which is inactive and costly.

In addition, equitized enterprises also face another problem, which is the difficulty in accessing credit. After equitization, the proportion of loans from state commercial credit sources has decreased significantly. In addition, the conditions for credit, mortgage, asset pledge and trust

When bank lending has changed significantly for enterprises before and after equitization. These are obstacles that arise and cause limitations for joint stock companies.

The trust of state agencies in joint stock enterprises has also changed, specifically: to get tax refunds, state-owned enterprises must follow the principle of refund first, check later, while joint stock companies are required to check first before getting refunds later. In addition, joint stock companies are also "disadvantaged" because financial support through preferential loans and financial measures such as debt suspension, debt extension, debt cancellation, conversion of loan capital into state investment capital... are no longer applied after equitization.

Inadequacies in determining business value

Currently, the biggest obstacle slowing down the equitization process of State-owned enterprises in the City is the issue of determining the enterprise value. According to the synthesis of the Department of Finance, the time from the establishment of the Steering Committee to the determination of the enterprise value accounts for 32% and from the valuation to the announcement of the enterprise value accounts for 30.6% of the total equitization time. Thus, we see that enterprises are very confused about this [72, p.5].

If the enterprise value is determined properly, it will ensure the interests of investors and the interests of the State. However, the determination of enterprise value is still administratively subjective, lacking the support of professional consulting agencies. In addition, the problem of handling financial problems also causes many difficulties in determining enterprise value. Although there have been many documents guiding the handling of finances when converting state-owned enterprises into joint stock companies, this problem has not been thoroughly resolved.

In determining the value of enterprises, the biggest difficulty is calculating the value of land use rights. Some enterprises in the capital have prime locations due to the characteristics of land rent differences, have the value of creating compensation, leveling or have received a lot of investment from the State in the process of creation and use before when they were state-owned enterprises; the investment value spent by the City is very large to build infrastructure. Land for production and business facilities and services in the City is a very scarce resource with no source, so the actual land rent difference is very high; this is also a large source of revenue for the City that is accepted by society. If the City loosens management and regulation, this land rent value will create loopholes causing loss of state assets. When equitizing state-owned enterprises, if this value is not taken into account, it will be a premise for joint stock companies to sell and transfer land and factories to earn profits arising from the sale and transfer of land, not from the actual production and business activities of the enterprise, thereby affecting the goal of equitization.

In addition, determining brand value is also confusing. Because this is an intangible asset that is difficult to determine because businesses trade in different products, have different advantages and reputations in the market, it is difficult to have a common document to determine brand value. Therefore, the time to determine corporate value is prolonged, slowing down the equitization process and many cases of unreasonable determination occur, causing loss of assets to the State or damage to businesses.

Some shortcomings in the refund of reserves into state capital, determining the value of fixed assets at the time of determining enterprise value, and valuing financial investments at the time of transferring state-owned enterprises into joint stock companies are still confusing and inadequate.

Determining debts is also difficult because the outstanding debts have been lingering for many years, the assets are not needed, the goods and materials have been in inventory for a long time, and have gone through many directors without documents or books, so they cannot be determined.

According to a survey by the Hanoi Institute for Socio-Economic Development, 97.9% of equitized enterprises apply the asset method when valuing. Meanwhile, modern and market-based valuation methods such as the discounted flow method are not used or are used insignificantly. Although the asset valuation method has been revised and supplemented several times, it is still essentially an assessment based on books and market price references. The main advantage when choosing this method is that the equitized apparatus has a lot of experience in implementation and is hesitant to apply new methods.

Many companies have not innovated

According to a 2015 survey by the Institute for Socio-Economic Development Research, many enterprises after equitization still use almost the entire old management apparatus. Specifically, at the time of equitization, about 70% of management positions remained unchanged, after equitization, 81.5% of enterprise directors retained their positions, about 78% of deputy directors and chief accountants remained unchanged, and almost no enterprise after equitization used the mechanism of hiring an executive director.

Experts say that this situation will reduce creativity, thinking and business management style, causing negative impacts on business. According to the survey results, only 25% of CPH enterprises have implemented the transformation.

market and product structure. Less than 28% of enterprises carry out radical innovation in their technology and production processes.

Shareholders' awareness of rights and obligations towards the enterprise is not correct.

According to some surveys, there is still a large number of shareholders who do not properly perceive their rights, interests and obligations towards the enterprise, so there are two extremes: either shareholders do not clearly understand the legal regulations on the powers of shareholders, the board of directors, the board of supervisors, the director as well as the procedures and order of organizing shareholders' meetings, especially extraordinary shareholders' meetings... leading to shareholders abusing their power and interfering too deeply in the management and operation of the company. Or shareholders are too hesitant, not fully using their legitimate powers in the management and operation of the company, leading to the consequence that the shareholders' meeting becomes a formality, and the shareholders themselves change from being "investors" to "savers". Many shareholders who are employees in the enterprise do not see their role as real owners to actively participate in discussing and voting on important issues of the company such as deciding on strategic orientation, goals, tasks, using profits, and electing the Board of Directors at the General Meeting of Shareholders.

Labor and salary issues in enterprises after equitization

In principle, when converting to a joint stock company, the company operates according to the Enterprise Law. However, many enterprises have not proactively researched and have not known how to take advantage of the new model to build labor norms, technical standards, professional standards, and proactively pay salaries to employees, but mainly still apply the salary scale system, payroll, and salary allowances prescribed by the State for state-owned enterprises. Therefore, it also inherits the inherent disadvantages of the salary regime in the state-owned enterprise sector, which are: salaries and incomes of employees are not really linked to labor productivity and production and business efficiency; have not created motivation for managers and employees in the enterprise...

Many joint stock companies have problems paying social insurance for employees and managers. For social insurance agencies, they only accept insurance payments according to the scale and salary table that the enterprise has registered. While as mentioned, not many joint stock companies build their own salary scale as a basis for salary payment, so paying social insurance

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