Proposal that state-owned enterprises are not allowed to contribute capital to the real estate sector

On the morning of October 7, at the 38th session, the National Assembly Standing Committee gave opinions on the Draft Law on Management and Investment of State Capital in Enterprises.

Presenting the report on behalf of the Government, Deputy Minister of Finance Cao Anh Tuan said that the draft law closely followed the purpose, guiding viewpoints and specified the content of 6 policy groups when proposing to develop the draft law.

In Article 25, the draft Law on Management and Investment of State Capital in Enterprises stipulates that investment projects of enterprises must be approved by competent authorities in accordance with the provisions of investment law or have investment policy decisions made in accordance with the law on public investment implemented in accordance with the order, procedures and authority of investment law or public investment law.

"Investment projects of enterprises that require investment policy approval that are not subject to the provisions of investment law and public investment law shall be approved in accordance with the provisions of this Law. After the competent authority decides to approve the investment policy, the enterprise shall implement the investment project in accordance with the provisions of investment law, construction law and other relevant laws," Mr. Cao Anh Tuan stated.

Another notable content in the draft law is Clause 2, Article 27, enterprises are not allowed to invest capital to establish enterprises, contribute capital, buy shares, or buy capital contributions in the real estate business sector.

Enterprises with State capital are also not allowed to invest capital to establish enterprises, contribute capital, or buy shares in banks, insurance companies, securities companies, venture capital funds, securities investment funds, securities investment companies, and securities investment fund management companies, except in cases where enterprises have the function of investing and trading State capital, or doing business in the fields of banking, insurance, and securities.

Examining this content, Party Central Committee member and Chairman of the National Assembly's Finance and Budget Committee Le Quang Manh said that the majority of opinions in the examining body believe that the management principles and decision-making authority on investment activities of enterprises stated in the draft law are not really consistent with the spirit of decentralization and delegation of power to enterprises, and still interfere administratively in the management of enterprises.

"In addition, some regulations on business investment activities are not consistent with relevant legal regulations such as the Investment Law and Enterprise Law. Therefore, it is recommended to review regulations to avoid overlap in business investment activities," said Mr. Le Quang Manh.

In the case of investing in normal production and business projects using enterprise capital, the National Assembly's appraisal agency believes that it should consider and decentralize the decision and responsibility to the Board of Members; the specific procedures can be assigned to the Government for detailed regulations.

In case of investment in production and business projects using budget capital, the enterprise shall be assigned as the investor according to the provisions of the law on public investment.

Speaking at the meeting, Party Central Committee member and National Assembly Vice Chairman Nguyen Khac Dinh proposed reviewing the entire draft law to consistently reflect the ideology of Resolution 12 of the 12th Party Central Committee on continuing to restructure, innovate and improve the efficiency of state-owned enterprises.

Mr. Nguyen Khac Dinh emphasized the consistent view that the State does not directly intervene in the production, business and management activities of enterprises.

"State capital after investing in an enterprise is determined to be the enterprise's assets and capital, but if we have to ask for everything and go through procedures, we will lose business opportunities and opportunities," said Mr. Dinh.

Agreeing on some regulations such as prohibiting state-owned enterprises from investing in real estate, the Vice Chairman of the National Assembly said that when capital is transferred to enterprises, it should be considered the enterprise's capital, and the enterprise should be allowed to make its own decisions instead of having to ask for everything.

Commenting on the provisions of Article 25 of the draft law, businesses "cannot do anything", according to Mr. Nguyen Khac Dinh, private businesses are effective because they save time, simplify procedures, and reduce costs of applying for permission here and there.

Vice Chairman of the National Assembly Nguyen Khac Dinh reiterated the requirement to cut down and simplify administrative procedures to the maximum extent, limit the request-grant mechanism, and increase decentralization and delegation of power. However, the draft law has not cut down many procedures and has not decentralized or delegated much power.

Mr. Nguyen Khac Dinh said that the draft law requires businesses to submit too many things, from procedures, strategies, directions, plans...

"If people have taken full responsibility and have to ask for everything, how can they take full responsibility?" said Vice Chairman of the National Assembly Nguyen Khac Dinh.