Drive on to publish state-firm books
State auditors are pushing Prime Minister Phan Van Khai for permission to publish the accounts of the country's biggest 14 corporations, in a significant shift in attitude towards disclosing the financial health of state-owned enterprises.
The move is intended to spur the performance of businesses in the state sector and to boost prospects for floating state corporations ahead of the country opening its first stock exchange, according to officials quoted in the state-owned Vietnam Investment Review.
'Greater financial disclosure by these corporations would . . . provide their potential business partners . . . with much more confidence,' one official said. 'Some corporations have backed down from plans to issue bonds because . . . their unclear financial status has scared off investors.' Vietnam last year took the unprecedented step of auditing the 14 biggest state-owned-enterprises - including Vietnam Airlines, Vietnam Post and Telecommunications and the national power, steel, cement and coal corporations.
Those audit reports were submitted to the prime minister's office but have not yet been made public, although the official said that audits this year would also include government entities in the paper, coffee and shipbuilding sectors.
The lack of financial information on state-owned enterprises has complicated privatisation and the lack of detailed information has thwarted attempts to raise capital for much needed modernisation.
It has also raised serious doubts about the government's intention to open a stock exchange, a proposal first mooted in 1994 but which now looks unlikely before the middle of next year.
Most of Vietnam's 5,500 state-owned companies have never been audited, but observers claimed yesterday that the move towards more financial transparency indicated a significant change to Vietnam's business culture.
'We hear a lot of complaints, but the last 10 years have brought about tremendous changes really. In fact the business environment in Vietnam has never been better,' said the principal of one foreign auditing and accounting firm.
'People are pretty tough on this country, but really it is no different from any other which is undergoing an economic transition,' the principal said.
Other foreign auditors have welcomed the prospect of greater transparency and expressed the hope that government companies will soon open their books to international accounting companies.
'The [routine publication of audit reports] would raise the confidence of everybody . . . lenders, investors and companies themselves would all be encouraged,' Ernst and Young's Duong Quang Thang told the Vietnam Investment Review.
VIETNAM
