Audit of state corporation contained mistakes, says minister

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Vietnam's Minister of Finance Vu Van Ninh told a parliament session Thursday that a headline-making audit of a state-owned corporation last year had mislead the public due to errors.

 

According to Ninh, the high salaries that the audit reported State Capital Investment Corp. (SCIC) as paying to its executives had included items that were not salaries, such as extra pay, bonuses and meal allowances.

  

The minister, who is also the corporation's chairman, said it was unreasonable for state auditors to calculate the items, including his mobile phone allowance of VND600,000 a month, as salary.

 

SCIC, the government's investment arm, paid salaries and its executives received incomes in line with regulations, Ninh said.

 

Speaking with the press on the sidelines of Thursday's meeting, Nguyen Duc Kien from the National Assembly's Economic Standing Committee said the salaries and incomes of SCIC's executives were reasonable given the company's capacity and performance.

 

Compared to salaries at other state-owned organizations, SCIC executives' salaries were high, but they weren't high at all compared to foreign-owned companies and joint-ventures, Kien was quoted as saying by local news website VnExpress.

 

According to Kien, what matters is how much executives can contribute to the state budget, not how much they are paid.

 

"I think the government is willing to pay you $1 million, if you can make the state budget earn billions of dollars," Kien said.

 

He stressed that executives at state-owned companies were businesspeople after all, so they should be treated differently, based on the benefits they bring.

But, he admitted that SCIC was wrong to let its staff work so much overtime. He promised to "correct" that problem. 

 

Last December, state auditors concluded that SCIC paid out excessive salaries to its executives, up to VND80 million (US$4,370) a month, compared to the monthly payments of VND40 million that it had proposed for its managers in a business plan submitted to the government earlier.

 

The salaries were "excessively high," especially when compared to the corporation's unimpressive business performance, they said.

 

The corporation manages a huge capital base of more than VND40.7 trillion ($2.2 billion) invested in more than 800 companies, but in 2008 it had low returns on equity of only 12.4 percent, according to auditors.

 

Also at the National Assembly meeting, Ninh denied allegations that the ministry was trying to hide part of Vietnam's government debt. He said he had reported all debts precisely because he would be the first one to be held responsible if the country goes bankrupt.

 

Vietnam's government debt stands at 41.9 percent of gross domestic product, and the country has no overdue or bad loans, Bloomberg quoted Ninh as saying.

 

"We are managing the government debt within the permitted range," he said.

 

On the grill  

 

The second minister to be questioned by policy makers that day, Minister of Transport Ho Nghia Dung rejected accusations that the ministry had planned an underground tunnel instead of a flyover on Hanoi's Lang Hoa Lac Expressway because the former would make a more convenient route to Bao Son Paradise Entertainment Park.

 

According to Dung, they were in favor of the underground tunnel, as it helped guarantee a "good view", stressing that they had no vested interests in the ongoing project.

 

However, the ministry will take proper measures if they find that anyone does, he stressed.

 

But deputy Dang Thuan Phong from the southern province of Ben Tre said Dung's answer was unconvincing because many other countries had already built flyovers that look beautiful.

 

Asked about allegations that state-owned companies, like Vietnam Waterway Construction Cooperation, were incurring losses without the ministry taking action, Dung said the ministry only supervises companies in terms of technical expertise.

 

The companies and their executives are responsible for their businesses, he said.

 

Dung also blamed the central province of Kon Tum for not reporting bridges damaged by storm Ketsana last year, making local people cross the Po Ko River via a dangerous zip-line for months without the ministry's awareness.

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