In 2009, the government issued Decree 09/2009/ND-CP dated February 5, 2009 governing financial management of state-owned enterprises (SOEs) and management of state capital in other businesses.

Under the decree, SOE investments in areas outside their traditional business lines, particularly in ‘sensitive areas’ such as securities and insurance, will be strictly controlled.

SOEs are only green-lighted to invest in a single business in a particular area and their capital contributions must not exceed 20 per cent of the capital recipient’s charter capital. The capital contribution by a parent company and its subsidiaries under the same corporations and groups must not exceed 30 per cent of the capital recipient’s charter capital.

Under the decree, state-owned PetroVietnam group was prevented from forming a new bank as it had earlier pooled capital into another bank, Ocean Bank. PetroVietnam, like a number of SOEs, gradually withdrew investment from risky ventures such as stock purchases.

Decree 09 reportedly cast big impacts on the performance of SOEs with strong business in outside areas such as power and petroleum firms. The impact of the decree on SOEs operating in textile, garment and rubber fields was insignificant, partly because in 2009 these firms had ample capital sources with reasonable lending rates.

Things have changed greatly within the past six months. State tightening credit policies propelled scores of SOEs to take back capital from risky investment ventures.

The director of a securities firm said a big state-owned financial company which opened a transaction account at the firm sold most of its investment at the firm to take back capital, not waiting for the stock price to significantly augment to sell as usually.

In late 2010, Vinatex withdrew its capital from Navibank. Earlier, Vinatex reportedly disinvested from Gia Quyen Securities Joint Stock Company.

Gia Dinh Textile and Garment Company, a big shareholder of Bach Tuyet Cotton Joint Stock Company, refused to buy additional shares BBT issued to raise charter capital.

Financial firms under big state-owned groups reportedly gradually took back their financial investments and focused on core functions of raising capital on behalf of other members under the same group.