Valuation company colluded in price gouging and price hikes.
Participating in the questioning session, delegate La Thanh Tan (Hai Phong City Delegation) requested the Minister of Finance to inform about the results of price inspection in 2023 and solutions to improve the effectiveness of price inspection in the coming time.
At the same time, I would like to know the Minister's viewpoint and solution to the current situation where many valuation enterprises refuse to appraise bidding prices for purchasing equipment for regular operations of State agencies and calculate land prices to determine financial obligations to the State.
Debate at the meeting, delegate Ta Van Ha (Quang Nam Province Delegation) said that recent times have shown that valuation companies not only play an important role in the economy, but in recent cases of violations, the role of valuation companies is also very important, responsible, or even aiding in lowering or raising prices.
According to the delegate, there are many reasons, but the important reason is that recently there has been an overheated increase in valuation enterprises, leading to collusion and violations. However, after handling the violations, they do not dare to do anything, causing difficulties in the operation of the economy. Therefore, the delegate asked the Minister to state the responsibility of the Ministry in this matter; at the same time, provide solutions to overcome the above limitations in the coming time?
Meanwhile, delegate Pham Van Hoa (Dong Thap Province Delegation) assessed that among more than 200 independent auditing enterprises, the majority performed their service functions well. However, there were many cases where the audit subjects' errors were overlooked for the auditors' own benefit, leading to loss of state budget and covering up negative violations, such as the SCB case where up to 3 large-scale auditing enterprises committed violations.
Delegates questioned, with the function of managing the industry, what solutions does the Minister have to prevent and deter negativity in the private auditing industry?
The law still has "loopholes" that appraisers take advantage of .
Responding to delegate La Thanh Tan, Minister of Finance Ho Duc Phoc said that the prices of goods, land and products determined by the State are specifically regulated in the Law on Prices and specialized laws. Accordingly, specialized prices are assigned to ministries for management, while the Ministry of Finance provides general guidance.
Regarding the fact that there are companies that refuse to be appraised, the Minister of Finance said that there are many reasons: It could be because these companies have a lot of work, are afraid of legal risks (due to poor capacity, regulations have different interpretations, which can lead to violations...)
The Minister of Finance gave an example of determining land prices using the surplus method, which means estimating assumptions leading to many different parameters, which can later lead to errors and the appraisal agency giving the advisory opinion is still responsible.
“The house is a future asset estimated to be sold at 20 million VND/m2, but when sold at 25 million VND/m2, the assessment result was wrong, the appraisal unit is responsible” – the Minister of Finance cited.
Responding to delegate Ta Van Ha, Minister of Finance Ho Duc Phoc stated that the view that the ministry has licensed many valuation companies is not entirely correct. There are currently only more than 200 valuation companies. To be certified, auditors must undergo training and exams, and in the past 3 years, the number of successful applicants has never exceeded 33% of the total number of applicants. The agency strictly manages licensing and operations. As in the SCB case, it is clear that the world's leading auditing companies all audit but all violate the law, so it is clearly due to the auditors and appraisers, not the management.
According to the Minister of Finance, some legal documents still have "loopholes" that appraisers take advantage of. Taking the example of land valuation, he said that "according to the surplus method, anyone who comes back to check will find mistakes". Because, the assumption is based on the investment rate because the asset is formed in the future. A house when establishing a project, approving the technical design, making an estimate, but when auditing, inspecting, and checking, it is still cut by 5-10%, let alone assuming according to the investment rate.
The Minister of Finance also frankly pointed out that there are projects that are not included in the investment rate regulations. For example, the investment rate does not have 3-4 basements, individual houses from the 4th floor up do not have them but only floors 1 to 3, so we have to assume and the assumption may not be correct. Thus, partly due to legal regulations, partly due to the price appraisal officers intentionally making mistakes, if violations occur, disciplinary action must be taken, even criminal action" - the Minister of Finance emphasized.
Responding to delegate Pham Van Hoa, the Minister of Finance said that some recent cases of independent audits having violations in some criminal cases were due to many factors: staff capacity, sense of responsibility and not excluding collusion in intentional violations. The Ministry of Finance has very strict instructions from the training stage to the certification examination for auditors. The country has 221 auditing companies, 2,363 auditors; Auditing methods have also been issued.
“In the coming time, the Ministry will continue to tighten the operations of auditing companies to re-examine records to see if there are any violations and then handle them. Along with that, we will strengthen training, improve professional ethics, culture and service level to perform our duties” - the Minister of Finance informed.
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