Equitised firms fall under the spotlight: Vietnam Investment Review talks to Ministry of Planning and Investment enterprise department lawyer Cao Ba Khoat -- also a member of the Enterprise Law Implementation Taskforce -- about land, tax and the rights of shareholders in equitised state-owned enterprises. (Insight: an inside view on the stories behind the headlines).

Vietnam Investment Review, February, 2002

Why do equitised businesses often face difficulty in land use rights transfer?

The main reason, especially in the case of urban-based businesses, is high land value and so land authorities feel reluctant to address the problem. This creates hardship for the business, which may have to mortgage land use rights to get bank credits. A deeper reason lies in the lack of attention paid to inheritance of a state-owned enterprise's (SOE's) rights under Decree 44/CP.

Is it true that when equitising a firm, the, authorities do not calculate land use rights value as part of the business value. So land position advantages make shares rise, and so cause conflicts between shareholders?

Exactly. Due to land price fluctuations, the value of shares of joint stock...