Shipping Corporation of India: The decision to separate the business of Shipping Corporation is final –

This time: The Ministry of Corporate Affairs has completed the final hearing on the proposed demerger process of parent and subsidiary companies of state-owned Shipping Corporation of India. According to officials aware of the matter, the proposed plan is likely to be approved by the ministry soon. Which will in fact clear the way for the Center to decentralize the country’s National Transport Corporation. However, the verdict is not out yet.

The official said, “Shipping Corporation of India’s demerger scheme was awaiting approval from the Ministry of Corporate Affairs. The matter was disposed of after a hearing last Thursday. Though the verdict is yet to be given.”

As part of the strategic sale process, the Center has proposed to sell shipping houses, training institutes and several properties. 1,000 crore of surplus cash held by the company under the modified divestment scheme will be transferred to unregistered branch companies. The original scheme was to transfer Rs 450 crore of surplus with the company to Shipping Corporation of India Land and Assets Limited.

The Ministry of Corporate Affairs was tasked with reviewing and approving the revised plan. After the Ministry of Corporate Affairs approves the amended scheme, it will be sent to the Registrar of Companies for implementation. In this context, the official said, “The ministry has examined in detail the opinions and objections received from all the beneficiaries regarding the separation of the business of the shipping corporation. It has also been considered whether the shipping corporation will be able to repay the debt after sending the surplus of Tk 1,000 crore to the branch.”

The liquidation department (Deepam) has sought approval to sell the government’s entire 63.75 per cent stake in the Shipping Corporation by December 2020. At the same time, it was also informed about the transfer of the management system of the organization. However, it has been delayed due to the process of separation of the parent and subsidiary businesses of the company. The Ministry of Corporate Affairs directed the Shipping Corporation to expedite the matter in April last year and asked the Board of Directors to review the business separation scheme.

In 2021, several tenders were submitted to buy the government’s stake in the Shipping Corporation. In November 2020, the Union Cabinet gave conditional approval for the demerger of the state-owned enterprise. Experts believe that this process will be completed by the financial year 2023-24.

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