Viet Nam’s State Capital Investment Corporation (SCIC) signed a memorandum of understanding with the International Finance Corporation (IFC) on improving corporate governance practices during equitisation, on December 7.

“Corporate governance has always been an SCIC priority to improve the performance of its portfolio. With a portfolio of about 200 companies, we are conducting thorough assessments to strengthen corporate governance in these companies to improve their value,” said Nguyen Đuc Chi, Chairman of the SCIC.

By purchasing equity in state-owned companies and mobilising capital from international buyers, IFC agreed to support SCIC and its portfolio companies in executing their divestment plan and exploring financing opportunities in the agribusiness, services, and manufacturing sectors. The two parties will consider privatisation opportunities on a case-by-case basis.

Over the next two years, IFC will develop a corporate governance-improvement plan, using international practices for some SCIC companies. IFC will also conduct annual training programmes for potential directors of corporations on various aspects of corporate governance, like board effectiveness, financial oversight and transparency.

“Co-operation with SCIC is part of our efforts to support the equitisation of state-owned assets and help further strengthen the private sector as a key driver for economic growth and employment in Việt Nam,” said Vivek Pathak, IFC’s Regional Director for East Asia and the Pacific.

IFC expected to not only increase the performance of the SCIC portfolio, but also to accelerate growth, and attract more foreign investment to State-owned firm equitisation.

IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets.

Since its first direct investment in Việt Nam in 1994, IFC has catalysed $5.6 billion of investment to 120 projects in infrastructure, manufacturing, agribusiness, renewable energy, and finance in the country. — VNS