Circular No. 14734/BTC-TCDN on the management and use of funds from the equitization of state-owned enterprises

Recently, some ministries and localities have requested the Ministry of Finance to retain funds from the equitization of state-owned enterprises according to Decree No. 187/2004/NĐ-CP dated November 16, 2004 of the Government on converting state-owned companies into joint-stock companies to supplement capital for state-owned companies and establish a fund to support small and medium-sized enterprises. To unify management, utilization, and ensure strict compliance with Decree No. 187/2004/NĐ-CP mentioned above and the directive of the Prime Minister in Directive No. 04/2005/CT-TTg dated March 17, 2005 on accelerating the conversion of state-owned companies, the Ministry of Finance proposes:
1. Ministries and localities should accelerate the implementation of restructuring and ownership transformation of state-owned companies according to approved adjustment plans. Resolutely implement the dissolution and bankruptcy of loss-making businesses that have lost all state capital.

Direct representatives of state capital at joint-stock companies to immediately remit all revenues (including dividends from state capital and deferred payment shares for employees) to the Enterprise Restructuring Support Fund at the Ministry of Finance (Account 942.01 at the State Treasury Exchange).
In cases where representatives of state capital at enterprises fail to fulfill their assigned responsibilities, it is recommended that the sectoral management ministries and provincial people's committees consider dismissal and replacement.

2. As for the balance of the Enterprise Restructuring Support Fund of localities as of December 10, 2004: Provincial People's Committees may use it to supplement capital for state-owned enterprises. If the provincial People's Committee does not need to use it, it is recommended to remit it to the Enterprise Restructuring Support Fund at the Ministry of Finance; avoid scattered investment and improper use. At the same time, provincial People's Committees must prepare final reports on the Fund to settle accounts with the Ministry of Finance.

The provision of capital support to enterprises in ministries and localities shall be carried out according to the following principles:

- The State budget or the Enterprise Restructuring Support Fund at the Ministry of Finance will only provide initial charter capital for state-owned companies where the state retains 100% of the capital, prioritizing companies involved in national defense and security tasks and those responsible for producing and supplying public goods and services. For business operations and other remaining companies, the state will invest and operate state capital to increase charter capital and expand business scale through the State Capital Investment Corporation to ensure efficiency and enhance the value of state capital in enterprises, without providing state budget capital to expand the charter capital of enterprises. Encourage enterprises to raise capital through additional share issuance to increase operational scale. For construction investment capital, enterprises need to borrow from banks, financial organizations, and issue corporate bonds domestically and internationally, and bear responsibility for effectiveness and repayment of loans. In certain special cases, the state budget may provide support for some investment items from allocated state budget funds, which must be managed and utilized in accordance with current laws on construction investment management and the State Budget Law.

It is requested that ministries and localities implement the spirit outlined above. Any difficulties encountered during implementation should be promptly reported to the Ministry of Finance for resolution.