Clarify the concept of state-owned enterprises

ANT Lawyers, Nov 23rd, 2012

Decree 99/2012/ND-CP regulating the distributed, decentralized implementation of the rights, responsibilities and obligations of the state owners of the State owned enterprises (SOE) has just been issued by the Prime Minister to clarify the concept of SOE.

Accordingly, SOE is an enterprise in which the State holds more than 50% of the charter capital, including enterprises that the State holds 100% of the charter capital which is limited liability company with one member; and enterprises that the State holds more than 50% of the charter capital which is joint stock companies, limited liability companies with two or more members.

The Government is also responsible for regulating financial management, profit distribution, and use of funds, reporting and financial disclosure, monitoring mechanism, and SOE investigation; recruitment, salaries and bonuses of the SOE; salary, bonus and other benefits of the President and members of the board members or the company president, controller, general manager ( director) of SOE; monitoring mechanism, insvestigation, and inspection of the adherence of the laws, implementation of strategies, plans, objectives and tasks of the SOE.

Decree 99/2012/ND-CP states: “The ministry is the immediate superior of the board members at state corporations”. Therefore, the  ministry is responsible for the proposal to the Prime Minister to establish objectives, tasks and lines of business corporations under state; reorganization, change of ownership , dissolution and bankruptcy of state corporations under their management.

Decree 99/2012/ND-CP assigns the ministry to supervise, inspect regularly the adherence of laws; management, usage, conservation and development of capital; implementation of strategies and plans; implementation of recruitment, salary, bonus policies of state economic groups.