Chief Engineer, Mr. Satish Chandra Tiwari who was employed by Varun Shipping Co Ltd filed an admiralty action in the Bombay High Court and have obtained an order of arrest of a tanker vessel m.t. Maharshi Vishwamitra owned by Varun that had arrived Sikka port for discharge of oil,
for his unpaid wages. The arrest order was obtained at Judges chamber on a non-working Saturday evening time.
In the Chairman's speech on the 41st Annual General Meeting Mr.
Yudhishthir D. Khatau stated that '..for the 18 months period ended 30th
September, 2012 the Company's freight and charter hire income for the 18
months period ended 30th September, 2012 was Rs.4,655.02 million and the
net profit after tax was Rs.383.65 million and the Board of Directors has
recommended dividend of 5 per cent, i.e. Re.0.50 per equity share for the
18 months period ended 30th September, 2012. I am pleased to state that
your Company holds an impressive track record of earning profits and
declaring dividends uninterruptedly to its shareholders for the past 28
years'...'During the period under review, Varun Gas Infrastructure
Limited, Varun Global Private Limited, Varun Resources Private Limited and
Varun Cyprus Limited became wholly owned subsidiary companies of your
Company. Further, Varun Asia Pte. Ltd., Singapore was a wholly owned
subsidiary of your Company for the period from 3rd April, 2012 to 28th
September, 2012 and is now an associate of your Company...'Your Company
presently owns and/or operates a well diversified fleet of 20 vessels
comprising 10 LPG carriers, 3 double hull aframax crude oil tankers and 7
AHTS vessels'...'With a view to realign businesses and increase focus on
individual growth strategies of each business, your Company together with
other companies has proposed to rearrange its businesses by segregating
its traditional shipping business, ship management (technical and
commercial management) Varun Shipping Company Limited.. and shipping
investment business (presently confined to holding investment in group
companies) into separate entities through a Composite Scheme of
Arrangement and Amalgamation (the "Scheme") under the provisions of the
Companies Act, 1956 which would create focussed entities thereby resulting
in enhancement of business prospects and shareholder's value. This would
also allow greater flexibility to shareholders in their investment
decisions in future...' At the Court Convened Meeting of the Equity
Shareholders of the Company held as per the directions of the Hon'ble High
Court of Judicature at Bombay on 8th January, 2013, the shareholders
approved the Scheme with overwhelming majority. Your Company has filed
petition before the Hon'ble High Court of Judicature at Bombay for
approval of the Scheme'.
The Amalgamation petition is pending hearing in the Bombay
High Court.
Varun Shipping is one of the oldest shipping companies in
India, the company had been struggling to pay its employees and
creditors in recent years, the company have recently defaulted in payment
of service tax to the tune of 7 crores, since last year the
companies ships are getting arrested by order of court but are paying up
after orders of arrest of their vessels are obtained.
The shipping industry is passing through a bad phase but the sector
appears to be improving and this could have affected their liquidity.
In January this year, Varun's vessel Maharshi Bharadwaj was
arrested by the Bombay High Court after its US based supplier Drew Marine
approached the court over non-payment of dues. In November this year,
Lisnave Estaleiros Navais, another lender, filed a suit against the
company for non-payment of dues amounting to Rs 4 crore, a matter which
was later settled out of court. There was another legal action by a
Singapore-based Avalontec, after they filed a suit in the Bombay
High Court, they paid. "After the vessel was arrested in these cases, the
company paid within a weeks time, but only after we approached the court,"
said Binita Hathi, partner at Brus Chambers, a law firm representing Drew
Marine.
It appears that the management has paid all its dues to the
shipping staff until December, but close to 20 per cent of its ground
staff have not been paid salaries for the past few months. It appears that
they have paid salaries to their floating staff until December. But, we
had some difficulty paying some of our ground staff.
According to Brus Chambers, the law firm that had
represented Drew Marine, Varun Shipping has also been hiving off their
vessels into separate subsidiaries and associate companies of the group to
escape the lenders. "They have been hiving off the vessels into separate
subsidiaries and associate companies. When we approached them for the
dues, we found out that the vessel for which the claims were made are no
longer registered under Varun Shipping, but a subsidiary." added Hathi.
Chief Engineer,
Mr. Satish Chandra Tiwari is also represented by the law firm Brus
Chambers. Dr. Shrikant Hathi of the law firm is relunctant to divulge
information if there are other crew who are unpaid and intends to initiate
legal action against any vessel owned by the company, as he has duty
towards his client to protect their interest.
In the meanwhile the existing crew on board the vessel m.t. Maharshi
Vishwamitra at port Sikka
have resorted to protest and are refusing to work as their wages too are
unpaid therefore the vessels berthing programme was cancelled by the port
authorities and is waiting at anchorage.
