This is the second time the Binh Thanh Real Estate Company has been listed for equitisation. However, progress has been slow due to challenges in evaluating the value of the company. Many of the projects invested in by the company over the past 20 years still lack legal documents.
Nguyen Hung Hao, Deputy Director, Binh Thanh Real Estate Company said: We’ve actually completed many projects. But some of them don’t have their legal paperwork completed. Due to the incomplete legal procedures, we can’t hand over the projects to investors. Therefore, it would be difficult to evaluate the value of our enterprise.
"There are Vietnamese enterprises in joint venture agreements with foreign enterprises. If the Vietnamese enterprises want to change to other foreign partners, they have to reach an agreement with the current foreign partner. If the foreign partner doesn’t agree, the two sides can’t resolve the dispute, then the value of the joint venture can’t be evaluated" said Huynh Trung Lam, Deputy head, Enterprise Reform Sub-committee, HCM City.
Evaluation headaches are also caused by unsolved bad debts and liabilities.
Do Thien Anh Tuan, Fulbright scholar said: The lack of financial transparency is a huge obstacle. State-owned enterprises didn’t follow standard financial accounting. If they are going to be privatised, they have to follow international rules if their shares are going to be listed on the stock market.
The government is attempting to resolve these problems. For example, if bad debts are difficult to evaluate, the debt may be allowed to be transferred to the parent company or sold.
Le Manh Ha, Vice Chairman, Government Office Deputy Head, HCMC Steering Committee for Enterprise Reform stressed: I think the key issue is the lack of collaboration between different departments and entities. For example, the management of land is a key issue right now. We need to clear up this issue as soon as possible.
Equalisation needs a transparent legal framework that clarifies the responsibility of each party involved to make the process more effective.
