Following the articles published in a number of newspapers such as Vietnamnet, Labor... dated 12/07/2023 reflected the Government Inspectorate (TTCP) announcing the inspection conclusion on the implementation of rearrangement, equitization, and divestment of state enterprises under the Ministry of Construction in the period 2011-2018 with the title "Cement Corporation "forgot" thousands of billions of dong when equitization".
AASC Auditing Firm would like to clarify more information and comment on this issue as follows:
1. Vietnam Cement Industry Corporation (“VICEM”) has determined the enterprise value at 0:00 on October 1, 2018. Enterprise valuation consulting unit - AASC Auditing Firm Co., Ltd (“AASC”) has deployed the service in compliance with Decree No. 126/2017/ND-CP dated November 16, 2017 of the Government and other relevant current regulations. AASC released the Enterprise Value Determination Dossier at 0:00 on October 1, 2018 No. 140119.016/BCTD.KT7 on January 14, 2019, and reported to the VICEM equitization Steering Committee in meetings on Corporate Value determined without taking into account the advantage of the value of mining rights because Decree 126/2017/ND-CP dated November 16, 2017 of the Government and current regulatory documents related to equitization have no guidance on determining the value of mining rights.
2. Based on the results of AASC's enterprise value determination and the contents discussed at meetings, on January 15, 2019, VICEM issued Document No. 99/VICEM-TGV to submit to the Ministry of Construction and the VICEM equitization Steering Committee the sets of Dossier to determine corporate value at 0:00 on October 1, 2018. On March 18, 2019, the Ministry of Construction issued Document No. 509/BXD-KHTC to the State Auditor to invite the State Auditor to audit the results of valuation consultancy and handle financial issues before the Ministry of Construction officially announced the value of VICEM equitized enterprise according to regulations. In this document, the Ministry of Construction stated: "VICEM's enterprise value does not take into account the advantage of the right to exploit mines due to lack of guidance".
3. Implement Decision 827/QD-KTNN dated April 16, 2019 of the General State Auditor on auditing the results of valuation consultancy and handling financial issues before the Ministry of Construction officially announces value of VICEM equitized enterprises, the State Audit conducted an audit from April 17, 2019 to the end of May 21, 2019. On July 29, 2019, the State Audit Office of Vietnam issued Document No. 348/KTNN-TH announcing the audit results on the results of valuation consultancy and handling financial issues before officially announcing the value equitized of VICEM. Accordingly, the State Audit has clearly stated that "in terms of materiality, when selecting the enterprise value and State capital value according to the plan that maximizes benefits for the State, then the enterprise value and State capital value at the parent company - VICEM at 0:00 on October 1, 2018 according to the asset method performed by AASC Auditing Firm Co., Ltd. is basically reasonable. Contents related to the determination of the value of mineral mining rights in the amount of VND 1,193 billion that the State Audit has calculated according to the Valuation Standard No. 06/2014/TT-BTC dated 7/7/2014 of the Ministry of Finance, the income method approach is not included in Section I by the State Audit Office. Audit results (difference between audited numbers and number of reports), which are only included in section II.4. Notes in the results of enterprise valuation and recommendations to the Equitization Steering Committee need to consider this content before deciding to announce the enterprise value and implement the next steps in the equitization process of the parent company - VICEM.
4. Implement the conclusions and recommendations of the State Audit in Document No. 348/KTNN-TH dated July 29, 2019, despite Decree 126/2017/ND-CP dated November 16, 2017 of the Government and The current regulatory documents related to equitization do not have specific instructions on determining the value of mining rights, however, in order to maximize the benefits of the State, the Vietnam Cement Corporation and the Business valuation consultant - AASC Auditing Firm Co., Ltd. has reported and approved by the Equitization Steering Committee, Ministry of Construction to add the value of the right to exploit limestone and clay quarries to the corporate value of the parent company - VICEM at 0:00 on October 1, 2018. On December 1, 2019, AASC re-determined the value of the right to exploit limestone and clay at VND 1,507 billion (higher than the calculated data of the State Audit of VND 314 billion). On December 19, 2019, AASC released the Dossier to determine enterprise value at 0:00 on October 1, 2018 No. 191219.003/BCTD.KT7 (adjusted after the State Audit), in which the enterprise value is included the value of the right to exploit the limestone and clay mines mentioned above.
5. In 2020, the Government Inspectorate will conduct an inspection at VICEM with the content of inspection on the rearrangement, equitization and divestment of State-owned enterprises under the Ministry of Construction in the period 2011-2018.
The above is the evolution of VICEM's enterprise valuation process in general and related to the valuation of limestone and clay mining rights in particular. During this process, AASC has always coordinated with VICEM to fully and transparently report the contents to the Equitization Steering Committee, the Ministry of Construction and relevant authorities, without "forgetting" thousands of billion dong upon equitization as reported by some press. VICEM itself also issued Official Letter 1729/VICEM-TGV dated September 5, 2019 to the Central Propaganda Department and the Ministry of Construction to clearly report a number of contents related to press information on valuation work of corporate value when equitizing VICEM.
In addition, on November 29, 2022, the Prime Minister issued Decision 1479/QD-TTg approving the plan to rearrange state-owned enterprises and state-owned enterprises in the period 2022-2025 and Vietnam Cement Industry (VICEM) is not part of the plan to be equitized in the period of 2022-2025. VICEM is currently a State Corporation, so the contents related to enterprise valuation at 0:00 on October 1, 2018 are not adjusted and shown in the financial statements of VICEM.
Above is more information shared by AASC Auditing Firm on the content that readers are interested in. Thank you very much!