Financial Daily from THE HINDU group of publications
Tuesday, Jun 06, 2006
Financial Daily from THE HINDU group of publications Tuesday, Jun 06, 2006 |
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Corporate
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Interview Logistics - Shipping We have no issues with GE Shipping demerger: ONGC
Mr R.S. Sharma, Acting Chairman and Managing Director of ONGC, has said that the company has no legal objection to the GE Shipping demerger. Mr Sharma stated that they do have issues with the contract management. The company has begun the process for sending consent papers. Mr Sharma added that they have given the consent internally. Excerpts from CNBC-TV18's exclusive interview with Mr R.S. Sharma: Give us an official comment on what your stand is on Great Offshore and GE Shipping. Do you have any issues on the demerger that you are trying to portray to the GE Shipping management? Let me clarify that we have no issues with the demerger. The contract that we have with Great Eastern Shipping Company has a clause regarding an assignment. According to that clause, in case they assign the contract to any other party, they should stand currently in case of a non-performance by the other party. This is not an assignment or a legal issue but it is a contract management issue. So, I have already conveyed to my people to process the case. There is a contract management and a demerger that we have to deal with accordingly. I have already assured that we will give our consent. You have no legal problems with the demerger as such? It is not a legal issue, the legal people have examined and they say that in case of an assignment, the assignee has to give the guarantee. So I have discussed it internally with my senior colleagues, directors and our legal associates. I have conveyed that it is not the legal issues; it is a contract management issue. Has this communication been presented to the GE management and have they taken any steps for that yet? The decision process is on files and papers. So, if I say it orally, it does not give the solution immediately. But it conveys the message and in due course of time, which I feel, in another 2-3 days, the files and papers should be coming in so I will give the decision accordingly. You have no problem in future in doing business with Great Offshore or giving them assignments? We do not have an issue on this demerger. I am informed about the court ruling; the court has even gone and said that the resources, financial strength of the current business of Great Eastern Company Ltd, GESCO with us is getting transferred to GE Offshore. So I see no worries and concerns on that. Do you see any stickiness on the issue of providing that guarantee on the contract as the GE Shipping management has mentioned that that they do not think it is a fair way to look at transferring the guarantee to the company, which has nothing to do with the offshore business as such, post-demerger? In case of an assignment, a guarantee is required by the assignee. So, we have discussed that it is not a case of assignment. Hence, there is no question of guarantee from the assignee.
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