Bosses from 29 state-owned firms in Ho Chi Minh City will face reprimands, salary cuts, or even the loss of their job if they fail to finish privatizing their firms in the next two years, according to a commitment they signed with city leaders Thursday.
The move was made as the privatization of state firms in Vietnam has slowed down over the last few years. Last year only three firms were equitized, compared to 13 the previous year and more than 800 between 2004 and 2005.
Textile and garment firm Giditex was among the firms that made a commitment to cut payments for its chairman and general director if it could not complete privatization by October next year.
Another, investment and import-export company Cholimex, will let the city’s People Committee decide the punishment for the firm if it fails to finish the task by December, 2015.
However Dao Xuan Duc, Cholimex’s general director, told news website Saigon Times that he doubted that all the privatization of 432 state firms across the country planned by the government over the next two years would be successful.
A huge supply in the Vietnam’s stock market as a result would offer portfolio investors diverse options, sparking off fierce competition, he said.
In mid-February, construction materials producer Viglacera could only sell a quarter of the shares it offered even at VND10,301. In Vietnam, the par value is set at VND10,000 per share.
The country, which is making attempts to strengthen the public sector by forcing state firms to divest from non-core areas and partially privatize, saw nine state firms miss their equitization due dates last year.
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