The newly issued decree concerning Vietnam Electricity Group (EVN) issued by the Ministry of Industry and Trade stated that the group's CEO will be dismissed if he lets the company suffer losses for two consecutive years.
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EVN's chartered capital as of December 31, 2012 reached USD7 billion, and the group has been given the goal of earning a profit.
The Ministry of Industry and Trade will be responsible for assigning EVN's CEO position and will cancel the contract if the CEO fails to maintain the expected return on equity or if he or she incurs losses for two consecutive years.
Both the CEO and chairman will also be dismissed if EVN incurs "inexplicable losses", and they will be required to pay compensation in accordance with the law.
In return, EVN will be given the authorisation to adjust the electricity prices within the regulated price limits.
Previously, a new decree was drafted to replace the decree 101 issued in 2009 addressing state-owned enterprises, also stated that CEO of the corporation must go if the mother company face losses for two consecutive years or was unable to achieve expected return on equity.
The CEOs of state-owned enterprises are to be sacked immediately if they fail to meet the members' council's tasks, violate the council's decisions or let the company fall into bankruptcy or refuse to file for bankruptcy if needed.
However, many CEOs have been able to dodge the regulation by justifying their losses, saying that they are a result of expansion or technology upgrades.
The Ministry of Industry and Trade said the corporate regulations must indicate in detail the requirements of CEO and that CEO terms must be no longer than five years
