Irano Hind Shipping Company, a joint venture between Shipping Corporation of India and an Iranian shipping company, will close operations following the United Nations sanctions against Tehran, an SCI official said today.
"Finding gainful employment and charters for the fleet was getting difficult following the UN sanctions and hence it has been decided that the company will cease operations," SCI chairman and managing director S Hajara said.
The JV between SCI and Islamic Republic of Iran Shipping Lines was incorporated in 1975 with its registered office in Iran. The JV was formed following an agreement between Indian and Iranian governments in 1974 to boost economic cooperation.
SCI holds 49% in the JV, whileIslamic Republic of Iran Shipping Lines has the rest stake.
Tehran has been under intense UN watch due to its alleged nuclear weapons programme.
Following the US and Israeli pressure, the UN Security council slapped economic blockade on Tehran, including oil sales, in 2010.
The Indian government since December 2010 has been facing trouble in settling its trade bill with Iranian companies as a result of the sanctions.
A decision to cease operations was taken last week at IHSC's board meeting, Hajara added.
He further said it is a lengthy process for a company to cease operations and it will involve the government approaching the UN Security Council, which will in turn approve the package.
It has been decided that the company's assets will be split between the promoters. According to SCI website, the JV had seven vessels as on March 31, 2010.
"The financial performance of IHSC has been consistent and it has good track record of repatriating dividends to its promoters," according to the SCI website.
All the vessels owned by the company, which include tankers, bulk carriers and container vessels, are registered in Malta, says the SCI website.
