Equitization of enterprises ‘locked’ because of land

On the morning of June 8, the loss of land and capital in equitization and divestment of State capital was questioned by many National Assembly deputies, Finance Minister Ho Duc Phuc.

Delegate Nguyen Thi Le (HCMC) asked the Minister how to identify and deal with the handling of real estate when equitization is slow, difficult and prolonged due to complicated land legislation.

Delegates Nguyen Thanh Cong (Ninh Binh), Nguyen Minh Son (Tien Giang) also raised problems in arranging and handling land of State enterprises with large land areas in many localities. “Is this the main cause of problems in divestment and equitization?”, he asked.

In response, Finance Minister Ho Finance admitted: “Loss in the recent equitization and divestment of enterprises was mainly from land, typically the case at Saigon Agriculture Corporation, Tan Corporation. Thuan…”.

According to him, the core problem in equitization is changing the purpose of land use.

According to current regulations, the People’s Committees of provinces and cities approve the change of land use purpose. This land is rented land, enterprises will pay a one-time land fee, and when transferring to a joint stock company, they ask the People’s Committee of the province or city to approve the change of land use purpose again. At that time, the price of changing land use purpose is recalculated, but because it is not close to the market price, it causes losses when changing the land use purpose from the State to the private sector.

In addition, according to Decree 32 of the Government, enterprise assets attached to the annual leased land are not included in the enterprise value, but the annual payment of land fee is attached to the enterprise value. Phuc said “this is a loophole that needs to be dealt with so as not to lose land when switching to equitization of enterprises”.

Recently, equitization has been slow because of this stage, according to the head of the financial industry. In 2021, only 18 businesses can divest or equitize 4 units, with a total budget revenue of more than VND 4,200 billion.

Mr. Ho Duc Phuc said that the Ministry of Finance had consulted many opinions to correct land regulations during the approval process of the equitization plan.

Accordingly, it will stipulate that land leased from State enterprises for production and business, when converting to joint stock enterprises, must also be used for this purpose by the private sector. If they have no need to use it, then return it, the State will then pay the money for the property on the land to businesses or auction organizations to collect money into the state budget.

Mr. Phuc said this has the benefit of boosting the economy’s capacity, which means that equitized state-owned enterprises will improve production capacity, not after equitizing workers, dissolving enterprises, then sell the land, take the difference in rent and convert it to residential land.

“The difference in rent will not fall into the pockets of businesses, but will be regulated by the State,” said the head of the finance industry.

Assessing that the above answer is not close to the question of the delegate, National Assembly Chairman Vuong Dinh Hue reminded the Finance Minister to clarify his point of view, that it is appropriate to include the housing arrangement process in the equitization process. reason or not.

Minister Phuc replied that attaching the housing arrangement process to the equitization process “is also reasonable”, because real estate is the property of the State, before moving to an arrangement, it must be arranged.

In addition, the current regulations on determining goodwill, including one-time payment of land rent in the enterprise value… many experts consider it unreasonable. Because the evaluation of goodwill currently does not have accurate evaluation criteria. If business value is included, “today may be high, tomorrow may be cheap”. Therefore, he said he would amend this regulation to avoid being taken advantage of.

Mr. Minh