-
The Ministry of
Finance is currently studying the implications of the revised
Land Law on LUR valuation for SOE equitization. According to the
new Land Law, all businesses have the right to choose between
the two forms of LUR (i.e. land lease or land allocation). In
cases where an SOE has allocated land, the valuation should take
into account the market value of the LUR.
Mr. Tran Huu Tien, Deputy Director,
Enterprise Finance Department, Ministry of Finance
-
 Resolutions
III and Decree 64/CP provides stipulations for including the
value of LUR in SOE valuation. However, most equitizing SOEs
object to including the full market value of the LUR on their
valuation, preferring instead to continue leasing land from the
State on an annual basis, and at a state-subsidized rate. They
argue that there are other enterprises–both state- and
privately-owned–that are located in good commercial areas and
lease land from the State. These companies do not include the
LUR value at market price in their valuation, so equitizing SOEs
should not have to do so either. Furthermore, the amended Land
Law allows firms to choose between leasing land or getting the
LUR 'assigned' from the State. The problem is both theoretical,
as the two legal documents are contradictory, and practical–two
enterprises located in the same vicinity can be valued very
differently because one is equitizing and the other is not. We
have not yet found a suitable solution.
Dr. Nguyen Huy Tuong, Vice Director of the Hai Phong Finance
Department
cum Chief of the Enterprise Finance Division
-
We originally
contributed a 20-year LUR to a JV, but when we equitized, we
only included a 10-year value, which was amortized over the
course of the JV's 10 years of operation. For the remaining 10
years, the equitized SOE–which is now a joint-stock company–is
applying, like other enterprises, to lease land from the State.
With this approach, the SOE is valued at a reasonable level,
enabling our own workers to purchase company shares. Employees
now hold 60% of Vinabico's shares. We would like to request that
the State speed up the process of leasing or allocating land to
equitized SOEs like ours.
Ms. Duong Hong Lam, Director, Vinabico Confectionery Joint Stock
Company
-
There are those who
believe that it would be a loss to the State budget in terms of
forgone revenue if the value of the LUR is not included when
SOEs are valued for equitization. But considering this issue
from a macro-economic point of view, I think it is not advisable
to include LUR in SOE valuation. First of all, it is very
difficult to accurately assess the value of a LUR. If based on
the State's price scale, then it is much lower than the market
rate; but if using the market price, there is no standard real
estate market for reference. Secondly, an unfair business
environment would be unintentionally created if the LUR is
included in the value of the equitized SOE, while other SOEs are
able to lease land or get land granted. If equitized SOEs are
disadvantaged in relation to non-equitized SOEs, then what is
the motive for equitizing? In my opinion, this issue can be
settled by simply leasing land to all enterprises, regardless of
type, so as to ensure a level playing field.
Mr. Nguyen Van Nghia, Officer in charge,
Enterprise Reform and Development Department, Office of the
Government
>> More...
|
