Hanoi (VNS/VNA) - The law on managing the use of State capital investedin an enterprise's manufacturing has revealed shortcomings, according tothe Ministry of Finance (MoF).

DangQuyet Tien, Director of the Department of Corporate Finance from the MoF, tolda workshop held between the ministry and the World Bank (WB) in Hanoi on April7 that: “The Law No 69/2014/QH13 created a legal corridor for the investmentof State capital in production and business in enterprises with incentivemechanisms and policies that have improved the country's investment, however,there are still shortcomings seen over the past five years.”

Tienmentioned some problems, including different understandings on State investmentin enterprises and a lack of clarity on the matter in related laws, whichlead to difficulties in implementation.

“Itis necessary to collect comments, analyse and propose amendmentsand supplements to the law to continue to improve policiesaccordingly," he said.

Proposingthe content to be revised, Dr. Le Dang Doanh said the new law shoulddefine the scope of the State's investment and the field of equitisation.

“Equitisationshould be done carefully with strategic shareholders in the board of directors,improving corporate governance quality and solving land-related problems inequitisation," Doanh said.

“State-ownedenterprises (SOEs) management needs to be reformed according to marketprinciples," he added.

Hesaid the State should still manage and supervise its capital but alsoavoid too much administrative intervention and human resource interventionin enterprises, adding there was a need for transparency in SOEs managementaccording to international standards.

NguyenThuong Lang from the National Economics University suggested the revisedlaw should comply with market principles where the capital investmentefficiency of State shareholders must be evaluated based on the added value ofinvested capital and dividends and distributed profits annually.

Economicexpert Nguyen Dinh Cung, former Director of the Central Institute for EconomicManagement (CIEM), said: “In the amendment of regulations, it is necessary toclearly state the responsibilities, rights and powers related to corporategovernance.”

Cungalso said the evaluation of the efficiency of State capital investmentactivities in an enterprise must comply with market principles, based on theadded value of investment capital and annual dividends and profits as they werethe ways to evaluate the efficiency of capital investment of the State as amajor shareholder.

Expertssaid the amended law needed to clarify the role of the agency representingthe owner, all activities of the enterprise must be performed by the executiveboard, separating the management functions of the State owner and at the sametime it is necessary to concretise the accountability of the head and applymodern governance according to international practices./.