Vietnam financial watchdog urges more supervision of SOEs

Thanh Nien News

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Financial consultants to Vietnam's government have proposed putting several state-owned enterprises under more direct and stringent supervision, saying that it could help prevent risks to the economy. 
Increased supervision is “very important,” given that SOEs still play a major role in the economy but they are often criticized for being ineffective, Truong Van Phuoc, vice chairman of the National Financial Supervisory Commission, was quoted by local media as saying at a meeting in Hanoi. 
Phuoc did not name a specific SOE. 
The commission has developed a system of supervision over the years that could be applied to the task of monitoring SOEs, chairman Vu Viet Ngoan said. 
He added that his watchdog agency has gained a lot of experience from overseeing more than 600 listed companies. 
As of the end of the 2013 fiscal year, the government was the sole owner of 796 businesses, according to the commission's latest report to the National Assembly. 
The sector’s debt was estimated at over VND1,514 trillion (US$70.9 billion), up 9 percent from the previous year. Its average ratio of debt to capital was 1.45, but 41 companies had a ratio higher than 3.0, according to local media. 
In a report released last October, the World Bank also named the structural problem of the SOE sector as one of the reasons for Vietnam's sluggish growth, together with subdued domestic demand and policy weaknesses. 

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