Decision No. 95/2000/QD-BTC On the issuance of the Regulation on management, collection, and use of the Fund for supporting the restructuring and corporatization of state-owned enterprises

DECISION OF THE MINISTER OF FINANCE

Concerning the issuance of the Management, Collection, and Use Regulations for the Fund to Support the Restructuring and Shareholding Reform of State-Owned Enterprises.

On the issuance of the Fund to Support the Restructuring and Shareholding Reform of State-Owned Enterprises.

 

THE MINISTER OF FINANCE

 

Pursuant to Decree No. 178/CP dated October 28, 1994 on the tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 44/1998/NĐ-CP dated June 29, 1998 of the Government on converting state-owned enterprises into joint-stock companies;

Pursuant to Decree No. 103/1999/NĐ-CP dated September 10, 1999 of the Government on transferring, selling, leasing, and entrusting management of state-owned enterprises;

Pursuant to Decision No. 177/1999/QĐ-TTg dated August 30, 1999 of the Prime Minister on the organization and operation of the Fund to Support the Restructuring and Shareholding Reform of State-Owned Enterprises;

With the approval of the Prime Minister as stated in Circular No. 32/VPCP-ĐMDN dated May 19, 2000 of the Government Office;

At the proposal of the Director of the Enterprise Financial Department, the General Director of the State Treasury

 

DECISION:

Article 1: This Decision promulgates the Management, Collection, and Use Regulations for the Fund to Support the Restructuring and Shareholding Reform of State-Owned Enterprises.

Article 2: This Decision shall take effect from the date when Decision No. 177/1999/QĐ-TTg dated August 30, 1999 of the Prime Minister comes into force and replaces Decision No. 01/1998/QĐ-BTC dated January 2, 1998 of the Minister of Finance on the issuance of the Management and Use Regulations for the Proceeds from the Sale of State Shares and Dividends.

Ministries, ministerial-level agencies, government-affiliated agencies, provincial People's Committees, and municipal People's Committees directly under the central government shall be responsible for coordinating with the Ministry of Finance to implement this Decision.

Article 3: The Director of the Enterprise Financial Department, the General Director of the State Treasury, and the management bodies of the Fund to Support the Restructuring and Shareholding Reform of State-Owned Enterprises at all levels shall be responsible for organizing the implementation of this Decision./.

REGULATIONS

MANAGEMENT AND USE OF THE FUND TO SUPPORT RESTRUCTURING

AND SHAREHOLDING REFORM OF STATE-OWNED ENTERPRISES

(Issued together with Decision No. 95/2000/QĐ-TC dated June 9, 2000 of the Minister of Finance)

CHAPTER I: ESTABLISHMENT AND SOURCES OF FORMATION OF THE FUND

Article 1: The Fund to Support the Restructuring and Shareholding Reform of State-Owned Enterprises aims to resolve employee benefits, create conditions, and provide financial support for state-owned enterprises during the restructuring process and ownership transfer, management method transformation, specifically for enterprises implementing division, merger, shareholding reform, transfer, entrustment, sale, and lease according to Decree No. 44/1998/NĐ-CP dated June 29, 1998 and Decree No. 103/1999/NĐ-CP dated September 10, 1999 of the Government, and Decision No. 177/1999/QĐ-TTg dated August 30, 1999 of the Prime Minister.

Article 2;The Fund to Support the Restructuring and Shareholding Reform of State-Owned Enterprises (hereinafter referred to as the Restructuring Enterprise Fund) shall be established at three levels: central, local, and Total Corporation 91; specifically:

1. Central Restructuring Enterprise Fund:

The capital of this Fund shall be formed from: revenues from the restructuring and ownership transfer of state-owned enterprises under the management of various ministries and sectors; financial contributions from domestic and foreign organizations and individuals to the Government and ministries for the restructuring and shareholding reform of state-owned enterprises; annual central budget allocation (if any).

2. Local Restructuring Enterprise Fund:

The capital of this Fund shall be formed from revenues from the restructuring and ownership transfer of state-owned enterprises under local management; financial contributions from domestic and foreign organizations and individuals to localities for the restructuring and shareholding reform of state-owned enterprises; and annual local budget allocation (if any).

3. Restructuring Enterprise Fund at Total Corporation 91:

The capital of this Fund shall be formed from revenues from the restructuring and ownership transfer of state-owned enterprises that are members of Total Corporation 91; financial contributions from domestic and foreign organizations and individuals to Total Corporation for the restructuring and shareholding reform of state-owned enterprises.

Article 3: Specific sources of revenue from enterprises into the Restructuring Enterprise Fund at the three levels mentioned above include:

1.Actual proceeds from the sale of state shares in state-owned enterprises during the shareholding reform (including proceeds from deferred payment of shares sold to employees).

2. Proceeds from activities such as selling and leasing state-owned enterprises (subsequently resold to the lessee) after deducting costs related to the sale and lease of enterprises; payment of outstanding wages, social insurance debts, secured debts, and other expenses as prescribed by law.

3. Proceeds from the transfer of employee shares in enterprises after three years of implementing the transfer to a collective of enterprise employees (collecting 30% of the share value at the time of transfer).

4.Proceeds from the recovery of difficult-to-collect debts, sale of unused assets, accumulated assets, and liquidation assets excluded from the enterprise value during the ownership transfer after deducting costs related to asset disposal and debt recovery activities.

5.Proceeds from the sale of assets of state-owned enterprises that have been dissolved, after deducting costs related to the dissolution of enterprises and payments of outstanding debts as stipulated in Circular No. 25/TC/TCDN dated May 15, 1997 of the Ministry of Finance guiding the procedures, formalities, and principles for financial handling when dissolving state-owned enterprises.

6.Dividends and income distributed from the state's equity in joint-stock companies and limited liability companies formed based on the ownership transfer of state-owned enterprises or contributed by these enterprises using state funds.

Article 4:For the proceeds from the sale of state shares of enterprises that have completed the shareholding reform and are currently deposited in the account "proceeds from the sale of state-owned enterprise shares," the State Treasury shall transfer the funds to the corresponding account of the Restructuring Enterprise Fund depending on the level of enterprise management.

With respect to State-owned corporations (having a Board of Directors) under themanagement of ministries and provincial People's Committees that have subsidiariesimplementing ownership conversion, depending on specific circumstances, the fundmanagement authority may consider allowing such corporations to retain fundsfrom selling state shares in subsidiaries undergoing ownership conversion tomeet investment development needs according to approved usage plans.

Article 5: Ministries, provincial People's Committees, and State-owned corporations shalldirect relevant functional departments:

1.Coordinate with the same-level enterprise financial authorities to examineexpenditures for ownership conversion at enterprises under their management anddetermine the amount that enterprises must pay into the Fund.

2.Urge subordinate enterprises implementing ownership conversion, asset liquidationboards, and dissolution councils (under ministries, localities, or State-ownedcorporations) to immediately deposit into the Fund proceeds from selling,transferring, or privatizing enterprises, liquidating assets of dissolvedenterprises, or recovering debts not included in pre-conversion enterprise value(after deducting expenses according to regulations).

3.Representatives of state capital in joint-stock companies and limited liabilitycompanies are responsible for monitoring and urging timely distribution andtransfer of income corresponding to state capital contributions into theenterprise restructuring fund accounts.

CHAPTER II: USE OF THE FUND

I.Addressing policies and providing support to workers in enterprises undergoingrestructuring and ownership conversion

Article 6Prior to implementing enterprise restructuring or ownership conversion, theBoard of Directors or General Director (for enterprises without a Board ofDirectors) and the Reform Committee at the enterprise shall coordinate with theenterprise trade union to:

1.Compile and categorize current employees of the enterprise undergoingrestructuring and ownership conversion according to the following categories:

a. Employees requiring training or retraining for new job placement.

b. Unemployed employees.

c. Voluntarily resigned employees.

d. Employees whose contracts have expired.

2.Develop a policy resolution plan for these employees in accordance withguidelines from the Ministry of Labor, Invalids, and Social Affairs. The policyresolution plan for enterprise employees must clearly specify:

a. Total costs for addressing employee policies.

b. The enterprise's ability to self-fund from the unemployment assistance reservefund.

c. The shortfall requested to be supported by the Fund.

3.Lists and policy resolution plans for employees eligible for retraining for newjob placement, employees whose contracts have expired, or voluntarily resignedemployees, and those unable to find work must be publicly announced at theenterprise and submitted along with the enterprise restructuring or ownershipconversion proposal to the competent authority for review and the enterprise restructuringsupport fund management agency for tracking and coordination.

Article 7:The level of support from the Fund for training and retraining to secure newemployment for workers continuing to work at the enterprise after restructuringand ownership conversion as stipulated in Article 6 is determined as follows:

1.For employees eligible for training and retraining at state-owned enterprisesafter division or merger: The Fund's support level equals 50% of the annualtraining and retraining cost standard set by the state; the remaining trainingcosts are accounted for and allocated to production and business expenses by theenterprise.

2.For employees eligible for training and retraining at state-owned enterprisesafter privatization, transfer, sale, lease, or contracting: Support is providedbased on actual incurred costs but not exceeding the annual training andretraining cost standard set by the state; the remaining training costs areaccounted for and allocated to production and business expenses by the enterprise.

3.Training and retraining cost standards will be adjusted appropriately over time,currently applying the training cost standards prescribed and implemented by theMinistry of Finance since 1998 (attached supplementary table).

Article 8. The level of support from the Fund to cover unemployment and resignationcompensation for workers losing jobs or resigning (contract expiration orvoluntary termination) at enterprises undergoing restructuring and ownershipconversion as stipulated in Article 6 is determined as follows:

-Unemployment and resignation compensation costs according to regulations setout in the Labor Code, Decree No. 198/CP dated December 31, 1994, Decree No.72/CP dated October 31, 1995 of the Government, and guiding documents of theMinistry of Labor, Invalids, and Social Affairs.

Article 9: Based on the approved support plan and level from the competent authority, theenterprise shall proceed to:

-Prepare documentation to request the Fund management agency to transfer supportfunds.

-Receive support funds from the Fund.

-Organize payments to beneficiaries.

-Settle accounts with the enterprise restructuring Fund.

Article 10: Documentation for requesting Fund support includes:

-The approved support plan to address worker policies at the enterprise (includinga list of workers entitled to compensation and the compensation amounts).

-A copy of the enterprise's financial report at the time before restructuring andownership conversion implementation.

-Training contracts between the enterprise and training institutions (in caseswhere the enterprise does not have its own training facilities).

Article 11: Settlement of expenses:

1.For unemployment and resignation compensation: Within thirty days from receiptof support funds, the enterprise or organization receiving and utilizing Fundsupport must report settlement of support funds to the Fund management agency.

2.For training and retraining support: Within thirty days after completion of thetraining program, the enterprise must report settlement of support funds to theFund management agency.

3.In case the allocated funds have not been fully utilized, the enterprise must report clearly the reasons and proposed solutions to the Fund management agency and the authority that approved the support plan for their comments.

4.Within no more than thirty days from the date of receiving the final settlement report on the support funds from the enterprise, the Fund management agency must conduct an examination of the final settlement report on the support funds with the enterprise or organization that has received it.

II. Supporting and investing capital in enterprises:

Article 12: Supplementing capital for state-owned enterprises according to plans approved by competent authorities.

1.Supplementing capital for state-owned enterprises that need priority consolidation.

2.Supplementing capital for state-owned enterprises whose state capital is insufficient to implement preferential policies regarding share prices for employees as stipulated in Article 14 of Decree No. 44/1998/NĐ-CP dated June 29, 1998 of the Government.

3.Supplementing capital for state-owned enterprises whose state capital is insufficient to ensure the controlling stake.

For such enterprises, the level of support from the Fund shall be determined based on: The necessary proportion of state capital required to maintain in the charter capital structure of the enterprise according to the ownership conversion plan approved by competent authorities and the actual amount of state capital currently held by the enterprise.

4.Supplementing capital for enterprises with a low proportion of state capital in operating capital, to facilitate the handling of overdue debts and restructuring of debts, improving production and business efficiency before ownership conversion.

For such enterprises, the level of support from the Fund shall be determined based on: The debt restructuring plan prior to implementing ownership conversion of the enterprise approved by competent authorities. The total amount of overdue loans and the actual payment capacity of the enterprise at the time of the decision to implement ownership conversion.

Article 13:Investing capital in enterprises that have completed shareholding reform.

1.Form of support: purchasing shares issued by the above enterprises to implement investment projects.

2. Level and scope of support from the Fund:

For state-owned enterprises that need to maintain a controlling stake: The Fund will arrange for the enterprise to provide capital support (purchase of shares) for the enterprise according to the approved support plan, project implementation schedule, and the necessary proportion of state shares to maintain in the enterprise's capital structure.

Article 14:Supporting the repayment of debts for state-owned enterprises implementing transfer, sale, or lease:

1.For enterprises transferring to a collective of workers: The Fund will arrange for the enterprise to support the social insurance debt repayment for enterprises unable to pay at the time of the decision to transfer the enterprise due to previous business losses.

2. For state-owned enterprises implementing sale or lease (then reselling to the lessee): The Fund will only support the repayment of social insurance debts, bank loans, and other payable debts when there is no buyer willing to assume these debts and the proceeds from leasing, selling the enterprise, recovering receivables, and the cash balance at the time of sale are insufficient for repayment. Such payments can only be made based on a decision by the Minister of Finance.

Article 15: Enterprises eligible for support and capital supplementation from the Fund under Articles 12, 13, and 14 above, when needed, must prepare a proposal for Fund support along with relevant documents (plans for shareholding reform, transfer, sale, or lease of the enterprise already approved or confirmed by competent authorities; decisions approving investment projects, share issuance plans, debt restructuring plans prior to ownership conversion already approved by competent authorities; financial reports of the enterprise...) to be submitted to the authority for approval of the support plan; simultaneously submitting to the Fund management agency for comments and coordination in implementation.

Once the support plan is approved, the enterprise must submit it to the Fund management agency for implementation.

Article 16:Enterprises receiving support and capital supplementation from the Fund are responsible for managing and using the support funds in accordance with the approved plan and are subject to supervision by the Fund management agency and the enterprise's financial department. If misuse of the Fund's support funds is discovered, the Fund management agency and the enterprise's financial department must report to the Minister of Finance or the Chairman of the People's Committee of the province or centrally-administered city or the Board of Directors of the 91 State-Owned Corporations for a decision to recover and handle violations according to current laws.

CHAPTER III: MANAGEMENT OF THE FUND

I. Hierarchical Management of the Fund

Article 17:Direct management of the Fund is divided and implemented according to Article 4 of Decision No. 177/1999/QĐ-TTg dated August 30, 1999 of the Prime Minister, specifically:

1.The central enterprise restructuring fund is managed by the Minister of Finance and used to provide financial support for state-owned enterprises under the management of central ministries and sectors during the restructuring and ownership conversion process; resolving employee benefits in these enterprises. The Ministry of Finance will allocate based on the use of funds from enterprise ownership conversion activities approved by sectoral ministries and the Fund's financial capacity.

2.The local enterprise restructuring fund is managed by the Chairman of the Provincial People's Committee, deciding to approve plans and financial support expenditures for state-owned enterprises under local management during the restructuring and ownership conversion process; resolving employee benefits in these enterprises.

3.The enterprise restructuring fund of the 91 State-Owned Corporations is managed by the Board of Directors of the Corporation, deciding to approve plans and financial support expenditures for member enterprises during the restructuring and ownership conversion process; resolving employee benefits in these enterprises.

Article 18:The agency assists the Minister of Finance, the Chairman of the People's Committee of provinces and centrally-administered cities, and the Board of Directors of the 91 State-Owned Corporations in managing the Fund.

1.The Corporate Finance Department assists the Minister of Finance in performingstate management functions over the activities of the Enterprise RestructuringFund system; reviews support plans for enterprises under various Ministriesand sectors; organizes inspections and supervision of the use of funds from theEnterprise Restructuring Fund at central enterprises; audits annual settlementreports of Enterprise Restructuring Funds at all levels and directly manages theCentral Enterprise Restructuring Fund.

2.The Department of Finance and Prices assists the People's Committee of theprovince/city under the Central Government in reviewing support plans for localenterprises; inspects the use of funds from the Enterprise Restructuring Fund atlocal enterprises and performs direct management functions of the local Enterpriserestructuring fund.

3.The Financial Department or the financial-accounting department of GeneralCompany 91 assists the Board of Directors in reviewing support plans for memberenterprises, collaborates with the Corporate Finance Department to inspect theuse of funds from the Enterprise Restructuring Fund at enterprises under theGeneral Company's management, and performs direct management functions of theEnterprise Restructuring Fund of General Company 91.

Article 19:Accounts of the Fund

1.The Enterprise Restructuring Fund shall be centralized at the State TreasurySystem, using and renaming the account "funds received from state-ownedenterprise shareholding" previously to the account "Support Fund forEnterprises Restructuring and Shareholding".

a)The Central Enterprise Restructuring Fund shall be deposited into account 945.06by the Minister of Finance or the person authorized to manage the account.

b)The Local Enterprise Restructuring Fund shall be deposited into account 945.07by the Chairman of the Provincial People's Committee or the person authorizedto manage the account.

c)The Enterprise Restructuring Fund of General Company 91 shall be depositedinto account 945.08 by the Chairman of the General Company's Board of Directorsor the person authorized to manage the account.

2.Opening, accounting, and using the "Support Fund for EnterprisesRestructuring and Shareholding" account shall be carried out according to theguidance of the Central State Treasury.

II/ Planning and Balancing the Fund:

Article 20:Plan for income and expenditure and balancing the Enterprise Restructuring Fund:

1.Annually, along with preparing the budget plan, based on the restructuring andownership transfer plan for state-owned enterprises, relevant Ministries,Provincial People's Committees under the Central Government, and GeneralCompany 91 shall instruct the Enterprise Management Reform Committee tocoordinate with the agency directly managing the Fund to prepare the income planand estimate expenditures from the Enterprise Restructuring Fund, report to theMinistry, Provincial People's Committees under the Central Government, and theBoard of Directors of General Company 91 for approval and submit to the Ministryof Finance (Corporate Finance Department).

2.Based on the management and usage situation of the Fund in the reported year,restructuring and ownership transfer plans of Ministries, localities, GeneralCompanies, and income and expenditure plans of various levels of EnterpriseRestructuring Funds, the Corporate Finance Department of the Ministry of Financereviews, compiles, and reports to the Minister of Finance the plan for using andbalancing the Fund nationwide.

Article 21: Balancing the Fund:

1.Based on the decision to reallocate issued by the Minister of Finance, within 15days from receiving the decision, the agency managing the Fund must proceedwith the procedures to transfer money from the Fund to the Central EnterpriseRestructuring Fund account. If the agency managing the Fund does not implementthe transfer within 15 days, the State Treasury where the Fund has its accountmust automatically carry out the reallocation of the Fund according to theMinister of Finance's decision to the Central Enterprise Restructuring Fund andnotify the agency managing the reallocated Enterprise Restructuring Fund.

2.Based on the approved support plan, the progress report of the EnterpriseRestructuring Fund management agency receiving support, the CentralEnterprise Restructuring Fund implements the transfer of support funds to theLocal Enterprise Restructuring Fund and General Company 91 in accordance withthe implementation progress and within the limit approved by the Minister ofFinance. Periodically or urgently, the Central Enterprise Restructuring Fundmanagement agency conducts inspections on the management and usage of thesupported Enterprise Restructuring Fund.

III/Payment of allowances and support: 

Article 22:The Enterprise Restructuring Fund only processes payments for allowances andsupport to workers and enterprises within the scope of beneficiaries when theyhave complete documentation and the support plan has been approved by thecompetent authority.

Article 23:Before disbursing and processing payments, the agency directly managing theEnterprise Restructuring Fund at all levels must recheck the conditions andcalculation of allowance and support amounts for the beneficiaries.

In cases where errors or unclear points are discovered, the agency directlymanaging the Fund must immediately report to the approving authority for timelyreview and adjustment. If the approving authority does not provide a reasonableexplanation, supplement the documentation, or adjust the allowance amount, theagency directly managing the Fund must execute the payment according to therevised amount and report to the Minister of Finance for resolution.

Article 24:The issuance and payment of allowances and support from the Fund to workersand enterprises undergoing restructuring and ownership transfer shall be carriedout in the following priority order:

1.Support for training and retraining costs for workers.

2.Support for policy resolution for workers who lose their jobs or resign.

3.Support for paying off wage arrears and social insurance debts.

4.Support to implement preferential pricing policies for workers in state-ownedenterprises undergoing shareholding that lack sufficient state capital toimplement such policies.

5. Financial support for state-owned enterprises prioritized for consolidation tofacilitate ownership transfer.

6. Investment in state-owned enterprises that have undergone shareholdingaccording to the approved plan by the competent authority.

Article 25:Based on the Decision approving by the competent authority and the Delegationof Payment from the agency directly managing the Fund, the State Treasuryproceeds with the procedures to transfer allowance and support payments toenterprises and beneficiaries.

The State Treasury shall not use the fund for purposes other than those specified or to settle expenditures contrary to the provisions of this Regulation.

IV/ Reporting and Accounting System:

Article 26:The enterprise restructuring funds at all levels shall be responsible for maintaining accounting books, recording all revenues and expenditures fully, and preserving relevant documents in accordance with the regulations set by the State.

The fiscal year of the enterprise restructuring fund begins on January 1 and ends on December 31. The first fiscal year shall be calculated from the date the fund commences operations until the end of the year.

Article 27:On a monthly and quarterly basis, the management agency of the enterprise restructuring funds at all levels (the Chairman of the People's Committee of provinces and centrally-administered cities for local enterprise restructuring funds; the Board of Directors of the General Corporation for enterprise restructuring funds of General Corporation 91) shall be responsible for reporting the management and usage of the fund to the Minister of Finance. In cases deemed necessary, the enterprise restructuring funds at all levels shall also be responsible for promptly reporting and explaining issues related to the management and usage of the fund according to the requirements of the Minister of Finance.

Article 28:At the end of the fiscal year, within a period of 45 days, the management agency of the enterprise restructuring funds at all levels must direct and urge the preparation and submission of the final report of the fund to the Ministry of Finance (Enterprise Financial Department) for coordination in inspection, review, and submission to the Minister of Finance for approval and consolidation of the report to the Government.

The final report of the fund must reflect comprehensively and truthfully the situation of the fund at the time of the report; the revenue and expenditure situation and remaining issues in the management of the fund such as: unpaid receivables or unspent payments; excess expenditures or lack of payment sources... accompanied by confirmation of the fund balance from the State Treasury where the fund has an account.

V/ Inspection - Final Settlement of the Fund

Article 29:The enterprise restructuring fund is subject to regular and periodic inspection and supervision by the Ministry of Finance.

Based on reports on the management and use of the fund from localities and General Corporations 91, the Enterprise Financial Department of the Ministry of Finance will develop and implement inspection work on the management and use of the fund according to the decision of the Minister of Finance.

Article 30:Final Settlement of the Fund:

1.Annually, the management agency of the enterprise restructuring funds at all levels shall be responsible for settling revenues and expenditures with the Ministry of Finance.

2.Within 90 days from receiving the final report of the fund, the Enterprise Financial Department of the Ministry of Finance shall be responsible for assisting the Minister of Finance in implementing the inspection of the final report of the enterprise restructuring funds at all levels.

3.The results of the inspection of the final settlement of the fund shall be reported to the Chairman of the People's Committee of provinces and centrally-administered cities, the Board of Directors of General Corporation 91, and submitted to the Minister of Finance for review and approval.

CHAPTER IV: HANDLING VIOLATIONS

Article 31:Acts violating the provisions of this Regulation shall be handled according to the current laws, depending on the nature and degree of violation.

ANNEX: BUDGET FOR ANNUAL TRAINING AND RETRAINING

Unit: Thousand dong/person/year