Hanoi (VNA) - Along with owners of State invested firms,the Ministry of Finance (MoF) will also participate in decision-making ondividend payout at firms to better manage State assets.

The decision wasmade under the MoF’s draft decree to supplement Decree 91/2015 on managing andusing State capital invested in firms.

According to theMoF, the dividend, if being paid at the firms, will be part of the Statebudget’s revenue so that it is appropriate for the ministry to takeresponsibility in monitoring it.

Dang Quyet Tien,deputy director of MoF’s Corporate Finance Department, said the draftregulation is aimed at enhancing the management of dividend and profitsgained from State capital investment, ensuring owners of firms do not keepprofits for their own purposes because of which interest from State capital isnot collected adequately.

In fact, inrecent years, some banks with State investment capital have paid dividend onlyto small shareholders, including executives or directors, but not Stateshareholders. This results in losses for the State, Tien said.

Tien said in2016, the MoF repeatedly sent letters requesting the State Bank of Vietnam todirect the representatives of State capital in BIDV and VietinBank to vote onpaying dividend in cash for fiscal year 2015 and contributed the entiredividend to the State budget.

After manyfollow-ups until early 2017, VietinBank finalised a plan to pay cash dividendfor 2015 at the rate of 7 percent, while BIDV kept its cash dividend payment at8.5 percent. According to calculations of some experts, the money collected bythe MoF from dividends was estimated at 4.6 trillion VND (201.75 million USD).

The Statecurrently holds stake in seven commercial banks - Agribank, BIDV, Vietinbankand Vietcombank, as well as Construction Bank, Ocean Bank and GP Bank.

Finance expertNgo Tri Long agreed with the MoF’s draft regulation, saying it would be aneffective way to help the MoF mobilise capital for the State budget when ownersof the firms did not pay dividend and used the funds for other purposes.

In contrast,expert Huynh Trung Minh said the regulation meant the State would apply moresupervision measures on State invested firms.

He was concernedthat if approved, the regulation would cause difficulties for firms as theywould have to consult the MoF on all issues.

Besides this,Minh said it would make the firms’ annual general meetings inconsequential andthe shareholders would feel they have no power. Therefore, investors’confidence in State invested banks in particular and State invested firms ingeneral would decline and this would affect the financial market, Minh said.

Echoing Minh,expert Le Dang Doanh suggested the MoF not add the regulation to the draftdecree but instead make some changes in State invested firms.

“It should firstset up a body to manage State capital at State invested firms. The body willdecide all relevant issues of the firms, including dividend payout and profits.This will be according to the market mechanism, avoiding inconvenience forfirms,” Doanh said. -VNA