7th May2000
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New shipping regulation to curb equity fraud

Shipping and Shipping Development Minister C Nanda Mathew, has already observed that many foreign shipping principals are blatantly violating the law in regard to shareholding in joint-venture shipping agencies.

When licensing joint-venture shipping agencies, it is a condition under shipping regulations that foreign principals should not hold more than 40 per cent of equity in any joint-venture shipping agency. This is also a pre-condition for Board of Investment (BOI) approval of such agencies.

In a press release Minister Mathew states that this rule is observed in the breach of many foreign principals, by getting Sri Lankans to hold shares on their behalf - as their nominees, trustees or agents - which is clearly prohibited under the regulations promulgated.

As such, he has directed that in future, all joint-venture shipping agencies should get the foreign equity holder(s) to furnish an affidavit that they do not hold more than forty (40) per cent of the shares of any joint-venture shipping agency. It is provided in the regulations that if such an affidavit is found to be false, it will result in the cancellation of the joint-venture shipping agency's licence.

Minister Mathew has therefore instructed the Director of Merchant Shipping to get joint-venture shipping agencies to comply with this proviso immediately.

Henceforth, the Director, Merchant Shipping, being the appropriate authority, will insist on such an affidavit before renewing a licence or issuing a fresh licence.

Shippers Association: Lanka at the helm

Sri Lanka will head the Association of Shippers Councils which includes Bangladesh, India, and Pakistan (ASCOBIPS) from June. Sri Lanka will take over from Pakistan, President, Sri Lanka Shippers Council, Rohan Masakorale told The Sunday Times Business.

Masakorale who will chair ASCOBIPS said he would be focusing shippers' attention on taking a regional stand in negotiating freight rates and other freight related issues including what he terms as shipping cartels. He said the council would also seek to extend its reach to the South Asian Association for Regional Co- operation. (SAARC)

While Sri Lanka was instrumental in formulating ASCOBIPS in 1980 the association has not played an active role as it has been constrained by the strained relations between India and Pakistan.

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