EU helps Vietnam on its poor corporate governance

By Grant McCool

HANOI, June 25 (Reuters) - Most Vietnamese companies lack corporate governance policies, a business group said on Wednesday as it pushed to improve the running of listed firms and to reduce risks of corruption and bankruptcy in the developing market.

The Vietnam-European Union Business Forum said it would take several years for "international best practices" to take root in the Communist Party-run country in transition to a market economy from central planning where state interests still hold sway.

"The majority of enterprises in Vietnam still do not have the essential skills and knowledge in this context of integration and competitiveness," Nguyen Hoa Binh, co-chairman of the forum, told a news conference.

Binh is also chairman of partly private Vietcombank, which has delayed listing to the third quarter of this year from 2007 as have many companies in a share market slump. The forum said it was distributing 3,000 handbooks on corporate governance nationwide, aimed at assisting Vietnamese company directors. The booklet is a summary of laws and regulations, most of them passed in the year before Vietnam became a World Trade Organisation member in January 2007.

Share values of the 291 firms on two small stock markets have plummeted under monetary tightening policies that sapped domestic investor confidence as the government fights double-digit inflation and trade imbalances.

The main Ho Chi Minh Stock Exchange .VNI is down 59 percent in 2008, the world's worst performer after gaining 23 percent all of last year as the economy was touted as the next Asian "Tiger".

The market closed up 2 percent at 383.78 points on Wednesday.

The smaller over-the-counter Hanoi Securities Trading Center .HASTCI has lost 65 percent this year. It closed up 1.9 percent at 112.06 points on Wednesday.