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Business News/ Industry / Manufacturing/  Varun Shipping loses licence to operate ships
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Varun Shipping loses licence to operate ships

The cancellation will only affect Varun Shipping's Indian-registered ships over which DG Shipping has jurisdiction

Varun Shipping has lost its licence to operate ships after it failed to carry out a mandatory dry-docking of its ships for safety surveys and pay wage arrears to its crew.Premium
Varun Shipping has lost its licence to operate ships after it failed to carry out a mandatory dry-docking of its ships for safety surveys and pay wage arrears to its crew.

Bangalore: Varun Shipping Co. Ltd, which runs one of the world’s largest fleet of liquefied petroleum gas (LPG) carriers, has lost its licence to operate ships after it failed to carry out a mandatory dry-docking of its ships for safety surveys and pay wage arrears to its crew.

The directorate general of shipping (DG Shipping) last week withdrew a so-called document of compliance of Varun Shipping—the first instance of the maritime regulator cancelling an Indian shipping company’s operating licence.

“I am directed to notify you that the Document of Compliance (DoC) issued to Varun Shipping Co. Ltd on 14 December 2012 is null and void since 4 March 2014 and that the vessels under your ownership/management are liable to be rendered ‘unseaworthy’...," Ajithkumar Sukumaran, deputy chief surveyor and senior deputy director general of shipping (technical), wrote in a 12 March notice to Varun Shipping.

Mint has reviewed a copy of the notice.

The cancellation will only affect Varun Shipping’s Indian-registered ships over which DG Shipping has jurisdiction.

Sukumaran said in the notice that statutory surveys and certifications for Varun’s Indian-registered ships were overdue for several months, making them unsafe. He asked the company to “lay-up all the vessels, immediately, at safe locations with requisite operational staff on-board..."

Yudhishthir Khatau, chairman and managing director of Varun Shipping, did not respond to calls made to his mobile phone seeking comment.

A DoC certifies that a ship-owning company has complied with the requirements of the International Management Code for the Safe Operation of Ships and for Pollution Prevention (ISM Code) of the International Maritime Organization.

It is issued by the maritime administration where a ship is registered, which in Varun’s case is DG Shipping. Failure to confirm to the rules could lead to suspension or cancellation of the DoC.

An immediate fallout of a DoC suspension or withdrawal is that the ships will lose insurance cover, said a Mumbai-based shipping consultant, who declined to be named.

In effect, “ships without a DoC will not be able to trade", he said on condition of anonymity because his company’s policy doesn’t allow him to speak to the media.

Mumbai-listed Varun Shipping has a fleet of 18 ships comprising 10 LPG carriers, three crude oil tankers and five so-called anchor handling, towing and supply vessels, or AHTSVs, that are used to support offshore oil exploration activities.

Of these, six LPG carriers and two AHTSVs are registered in India. Of the other four LPG vessels, one each is registered in Singapore, Cyprus, Indonesia and Marshall Islands; three crude tankers are registered in Singapore and three AHTSVs in Cyprus.

In October, DG Shipping had issued a notice to Varun Shipping asking why its DoC should not be suspended for not complying with the rules and regulations under India’s maritime law. Varun Shipping was also asked to produce a financial package to meet its backlog of crew wages and dry-docking commitments.

Statutory safety surveys, particularly expensive dry-dock repairs, have to be done twice in a span of five years on a ship, with intervals between them not exceeding 36 months, according to the rules.

The maritime regulator said recent reports submitted by Varun Shipping on its financial restructuring plans had indicated alarming trends, including a mounting pendency of seafarer wages.

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Published: 13 Mar 2014, 12:13 AM IST
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