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| Subsidiaries of state giants disallowed to contribute capital to holding companies |
| 07/Jan/2010 Intellasia | Vietnam Plus |
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| 6 Jan, 2010 - 2:12:57 PM |
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Ministry of Finance has lately issued Circular No 242/2009/TT-BTC guiding the implementation of financial management mechanism and investment capital management of SOEs.
In details, the circular regulates that member companies are not allowed to contribute capital in their holding companies. The subsidiaries and dependent firms are disallowed to contribute capital in other entities of the same group or corporation.
State groups and corporations are also disallowed to borrow loans by themselves to make their ratio of payables on charter capital surpass three times. If the ratio is over three times, these firms must report to state ownership representative for consideration,
If new fixed assets of SOEs do not bring in efficient business production, SOEs will have to sell inefficient assets and clarify responsibility of involved people for treatment under the current laws.
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