Hanoi (VNA) - Strategic investors may sell their shares in a State-ownedenterprise (SOE) three years after the firm is equitised, according to theMinistry of Finance.

Thecurrent time limit for strategic investors to sell their shares after SOEequitisation is set at five years.

Thechange is part of the draft decree on transforming SOEs into joint-stockcompanies that has been developed and proposed to the Government, according toDang Quyet Tien, deputy head of the corporate finance department at the financeministry.

Atthe ministry’s recent meeting, Tien said strategic investors would be able tobuy stake in a SOE after the company completes its initial public offering (IPO)auction instead of negotiating the deal with the company in advance.

Thedraft decree would also adjust some criteria to select the strategic investorfor a SOE and provide appropriate policies to sell shares in the company to thestrategic investor.

Forexample, the strategic investor’s business must be making profits and thereshould be no accumulated losses for the last two years up to the date when theinvestor registers to purchase shares from the SOE.

Thestrategic investor will have to compensate if it violates terms of the deal andthe compensation must be signed by the legal entity of the strategic investor.

Thecurrent time limit of five years has reduced interests and benefits forstrategic investors, according to Nguyen Duy Long, an official at the corporatefinance department at the finance ministry.

Thedraft decree aims to improve the situation, ensuring benefits of strategicinvestors who buy shares in SOEs and provide financial andtechnical support for the firms upon their agreements with theowners.  

“Inaddition, selling stake in SOEs to strategic investors through advanceagreements before the IPOs may result in loss of the State’s capital in thosecompanies due to the lack of transparency and publicity of the deals,” Long said.-VNA