Embattled shipbuilding group ABG Shipyard has landed in fresh trouble after India’s maritime regulator revoked a Document of Compliance (DoC) given to its ship-owning unit, PFS Shipping (India) Ltd, preventing it from operating ships.

The Directorate General of Shipping (DGS) said that the firm’s DoC, issued in March 2016, has been withdrawn due to “repeated violations” of the global code on mandatory safety requirements of ships and for non-payment of crew salaries for many months.

The DGS had issued a show-cause notice to PFS Shipping, which owns three off-shore oil exploration support vessels, on August 23 and the company responded on September 4.

The DG Shipping said that the firm’s reply to the notice “is not accepted, especially since the company had been adequately warned earlier and it has been repeatedly violating the ISM code”.

“In view of above.. your DOC has been withdrawn,” Satish Kamath, engineer and ship surveyor cum DDG (technical) at the DGS, wrote in an October 6 communication to PFS Shipping.

Kamath later told BusinessLine that “ship safety cannot be compromised with”.

PFS told the regulator that the three ships were not being used due to poor market conditions and it would comply with the code after getting contracts for the ships.

A DoC is issued by the maritime administration where the ship is registered — in this case by the DGS. Failure to conform to the rules could lead to its suspension or withdrawal/cancellation.

No cover

An immediate fallout of the withdrawal of the DoC is that these ships will lose insurance cover, according to a Mumbai-based shipping consultant. “Ships without a DoC will not be able to trade,” he said.

PFS Shipping has not been paying salaries to the crew and all its ships are laid up in Mumbai port, said B Ratna Sekhar, chief surveyor-cum-additional DG (Engineering).

Sekhar said that PFS Shipping can reapply for the DoC after rectifying all the deficiencies but would have to start the process afresh.

This, however, looks difficult given the parent company’s debt troubles, sources said. ABG Shipyard is facing insolvency proceedings in the National Company Law Tribunal after it defaulted on loans worth ₹4,500 crore.

In a July 4 stock exchange filing, the company said it was in a “deep financial crisis” after reporting a loss of ₹822 crore for the quarter ended December 2016, compared to a net loss of ₹1,266.22 crore a year earlier.

Lenders, who now hold a 51 per cent stake in the company after conversion of debt, had made an unsuccessful bid to sell the stake.

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