Investment into non-core businesses by State-owned enterprises (SOEs) is considered one of the main reasons for the current economic slump in Vietnam. To tackle this problem, the Government has tried to apply many measures. The most recent effort by the Government is Decree 71/2013. Although it is not clear, it seems that Decree 71/2013 will replace Decree 9/2009 from 1 September 2013. Under Decree 71/2013,

• an SOE (i.e. an enterprise which is wholly owned by the Government and is established by the Prime Minister, a Ministry or a provincial People’s Committee) is not allowed to invest in real estate (to the extent real estate is not its core business), banking, insurance, securities, or investment funds (prohibited sectors) except in case permitted by the Prime Minister. This requirement is much stricter than the current Decree 9/2009 which allows an SOE to invest up to 30% its capital in prohibited sectors;
• an SOE which has invested in a prohibited sector must restructure and divest in accordance with approved plans. Under Decree 9/2009, all SOEs are given two years to divest from prohibited sectors;
• an SOE may sell its investment in a limited liability company operating in a prohibited sector in accordance with the Enterprise Law provided that the sale price must reflect the actual value of State capital in the company including land use right value;
• an SOE may sell its investment in a joint stock company operating in a prohibited sector listed on a stock exchange or on “Upcom” market through auction sale, negotiated sale or matching order provided that the sale price is not less than the market price at the time of the sale;
• an SOE may sell its investment in an unlisted joint stock company operating in a prohibited sector by way of a public auction or, if the public auction fails, direct negotiation; and
• the sale price for an investment in a prohibited sector must be market price but not less than the book value of the investment. If the investment in a prohibited sector is less than book value, the SOE must obtain approval from the relevant Government authority. For the first time, Decree 71/2013 allows SOEs to sell their investment at losses. This is an important new point as previously Decree 9/2009 requires an SOE to “preserve” State capital when divesting from prohibited sectors.