Varun Shipping writes to Sebi clarifying stance on dividend payment

Company says it has paid total Rs 4.56 cr towards dividend payment apart from Rs 500,000 penalty

Varun Shipping today wrote to the Securities And Exchange Board of India (Sebi), clarifying its stance on dividend payment to the investors, stating that the company has not only cleared the dividend payment but has also paid up the interest for delay in dividend along with the Rs 500,000 penalty it was slammed with by the regulator for delay in taking steps to resolve investor grievances within stipulated time frame.

On April 24, Sebi slammed the shipping company with a notice asking promoters to resolve the pending 90 dividend related investor complaints within 30 days. The regulator had also mentioned that promoters of the company shall stand restrained and prohibited from accessing the securities market till the investor grievances pending are resolved.

Reacting to the news, shares of Varun Shipping had locked itself at 10% upper circuit since early trades today. Shares of the company ended at Rs 5.40 per share.

"We have written to the regulator today and with this, the matter stands cleared from our end," managing director, Yudhisthir Khatau told Business Standard. "The dividend issue has been cleared by additional capital brought in by promoters and the promoters infact have forgone their share of dividend to meet the full dividend resolution," Khatau added.

Promoter and promoter group of Varun Shipping holds 37.74% stake in the company as on December 2014. "We must have made a total dividend payment of about Rs 4.56 crore," said Khatau.

"We have not used the company's money at all for this. The entire contribution is from promoters," he added.

Varun Shipping had declared a token dividend of 50 paise per share of Rs 10 each for financial year 2011-12 as it was in restructuring its business divisions and also as it had very good track record of declaring dividends uninterruptedly for past 28 years.

Like all other shipping companies across globe, Varun Shipping too has bee going through difficult financial times since the financial crisis hit in 2008 where the entire industry global as well as domestic was badly hit.