Over a year after the government announced the end of 39-year-old Indo-Iranshippingjoint venture, the two countries are still debating how to go about the process of dissolving the company. Senior government officials told Business Standard Iran is not keen to dissolveIrano-HindShipping Company and wants to continue doing business with or without Shipping Corporation of India, its JV partner.India is considering the option of exiting the company by pulling its stake. "We cannot liquidate the company and then split the assets. Now that sanctions are also relaxing we might just divest our stake and let Iran continue alone," a senior official said.
In a recently held meeting to discuss this matter, several points of difference between the Iranian and Indian law came up with regards to the dissolution of the company. The two parties are yet to resolve this matter. "Terminating a joint venture is a painful process. The only reason we decided to end it was the UN sanctions," Arun Kumar Gupta, chairman, Shipping Corporation of India told Business Standard. He refused to give any further details on this matter.
United Nations sanctions against Iran had made it difficult for the company to operate. Irano Hind has seven ships in all, including tankers and bulk carriers of 0.66 million DWT.SCIwas expected to get the larger share of the liabilities and, therefore, the assets. The process of division of assets and liabilities was to start with the appointment of a liquidator. Last year, the cabinet had given its nod for the winding up the joint venture set up in 1975 after late Indira Gandhi's visit to
Tehran as a mark of friendship between the two nations. India's largest shipping firm, SCI owns a 49% stake in the venture, while Islamic Republic of Iran Shipping Lines holds the remaining 51%. SCI had invested close to Rs 40 lakh at the time of signing the venture for 49% equity. Though SCI's estimate of profits from the joint venture is not available, the company has been able to earn much more than its investment in the venture, despite a troubled business journey.
The purpose behind the partnership was not just to boost economic ties between the two countries but also to bring down transportation costs and time between India and Russia by creating a multi-modal transportation system via Iran.
By Business Standard
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