The Ministry of Finance (MoF) has proposed the government allow the State Financial Investment Corp (SFIC) to hire foreign experts to work for the management board.
The MoF has completed the draft prime ministerial decision on articles of association and operation of SFIC, under which the company has the right to hire foreign experts to work for the company’s management board. The provision is not part of the State Owned Enterprise Law.
The draft compilers explained that SFIC, as a specific SOE, needs a special mechanism for financial investment in a wide range of areas, requiring specialist consultancy.
The management board consists of seven members who are MoF leaders and corporate representatives, in which SFIC has high investment proportion.
There are also some other provisions that are not stipulated in the law. For example, the SFIC management board has a 3-year term instead of five years as stipulated in the law.
Under the draft, SFIC will have the initial capital of five trillion dong sourced from the state budget. However, the capital sum is expected to reach 30 trillion dong in the future. The additional capital will be sourced from the collection in the SOE restructuring process. According to MoF, the SOE restructuring of 3,200 SOEs by the end of the next year is forecasted to will net 25 trillion dong.
SFIC is scheduled to begin operations January 1, 2005. There is no precedent for a financial investment company in Vietnam. With SFIC, Vietnam will shift from the mechanism of state capital allocation to state capital investment in SOEs. Besides the capital investment which is the company’s main task, SFIC will also provide financial consultancy, securities issuance guarantee, and investment trust services.