Vietnam gov't plans to divest from unimportant state firms

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The Ministry of Finance says the government plans to categorize the state enterprise sector to identify which companies it can completely divest from.

Under a plan being reviewed by the government, state-owned enterprises will be divided into four groups based on their roles in the economy, Finance Minister Vuong Dinh Hue told a National Assembly meeting in Hanoi on Friday.

The government will withdraw its money from one of the groups, while its investment in other companies will range from 51 to 100 percent, he said.

"The most important task is to boost share sales, improve transparency and enhance the competitiveness of state owned companies," Hue told legislators at the meeting.

The remarks came amid strong criticism from the legislative body against the SOE sector, following the breakout of a major scandal involving state shipper Vinalines.

Deputy Nguyen Cao Phuc from the central province of Quang Ngai said many state companies have made bad investment choices, spending a lot of money expanding into business areas that did not bring back good returns.

He said now that the government has planned to withdraw its investment from some companies, he is worried that there will be loss of state capital if the process is not closely supervised.

Phung Quoc Hien, chairman of the National Assembly's Finance and Budget Committee, said in an interview on news website VnExpress Saturday that there have to be new regulations governing the spending of state companies.

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