Vietnam orders quick listing of state enterprises after IPOs

By Toan Dao   October 6, 2016 | 06:28 pm PT
Vietnam orders quick listing of state enterprises after IPOs
Deputy Prime Minister Vuong Dinh Hue in a meeting in June 2016. Photo by Vietnam Government Portal
Delays are estimated to cost the country $15 billion.

The Vietnamese government has ordered state-owned enterprises which have already had their initial public offerings (IPOs) to list their shares as soon as possible.

In a directive issued Thursday, Deputy Prime Minister Vuong Dinh Hue asked ministries, provincial and municipal governments and state-owned corporations to speed up the listing process.

They are required to report the results to the central government by November 1.

Hue’s order came just two days after Chairman of the Government Office Mai Tien Dung announced that Prime Minister Nguyen Xuan Phuc had ordered the Ministry of Industry and Trade to list the country’s two major brewers by the end of this year.

IPOs at Saigon Beer, Alcohol, Beverage Corp. (Sabeco) and Hanoi Beer Alcohol and Beverage Joint Stock Corp. (Habeco) took place years ago but neither of them has floated their shares.

The Vietnam Association of Financial Investors (VAFI) said in a letter sent to Phuc on Wednesday that “interest groups” allegedly put the brakes on the listing of several state-owned enterprises following their IPOs, including Sabeco and Habeco, costing the government an estimated $15 billion.

Unlike most other countries, Vietnam treats IPOs and listings as two different processes that are sometimes separated by years.

Legally speaking, companies are required to list shares on the local market within a year of an IPO. However, the maximum fine for violating that rule is a mere VND150 million (roughly $7,000). The country also prohibits the listing of "unqualified" stocks, a rule that may be used to legitimize delays.

In its letter, VAFI listed several signs that leaders at government ministries sought to postpone the listings. The group said certain officials had appointed unqualified relatives to key positions in targeted companies, doing serious damage to the trust of investors.

Related news:

> 'Interest groups' stifle stocks at Vietnam's state-owned brewers: investor association

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