Fairplay
November 13, 2003

CASH BUYERS DO HAVE SCRUPLES

SIR, I refer to your Newswatch article about cash buyers in Fairplay, 2 October (pp 14-15). My company is a ship S&P broker and is the one that sold the Yin Kim from our Turkish clients (as sellers) to clients of Messrs Global Marketing Systems (GMS) (as buyers).

Certainly nobody, knowing the real facts, can call the buyers unscrupulous. On the contrary, we can assure you that the buyers had always performed in a first-class manner and in total good faith.

When GMS sold the vessel to their end-buyers/breakers, certainly they were not aware of any other claim on the vessel. Unfortunately, that situation was discovered some time after all of us, including the buyers, delivered the vessel to the breakers.

When GMS bought the vessel, it was under arrest in Haldia and remained there for some time afterwards while GMS was paying all the notified claims on the vessel to enable its release from the various arrests.

Anyone would naturally thing that any other party having a claim on the vessel and knowing it is under arrest would have lodges its claim in order to secure their money. Therefore after having paid all the claims, release the vessel and sailed it from Haldia to Kolkata, and buyer in good faith, would believe it could then be delivered to the end-buyer/breakers free of impediment. This is what actually happened.

Unfortunately, the sellers were not as first-class as the buyers (GMS) and disappeared immediately after the delivery of the vessel, leaving GMS with unpleasant surprises and press publicity.

It is worth noting that when these new and unexpected claims suddenly arose after delivery of the vessel, GMS even lodged a substantial bank guarantee in India to release the vessel from these new claims, so that the breakers could proceed with their dismantling.

As far as we know, this bank guarantee is still lodged in India today. Certainly if cash buyers are unscrupulous as Fairplay alleges, GMS could have simply disappeared after the delivery without facing all these problems and heavy expenses.

We have sold ships to GMS’s clients since 1998 and can assure you that they are first-class buyers. Of course, nobody can exclude the possibility of there being some unscrupulous buyers in this business, but in what other business can you definitely state that no unscrupulous buyers exist?

With regard to your quoted source that "most ship owners are happy to get rid of their old ships through cash-buyers, as it allows them to escape any future responsibilities", if you wanted to report a real story about this complicated business, you could simply have ash shipowners or shipbrokers why they sell their ships through cash buyers. You would have easily discovered the real reasons.

With all due respect, anyone outside the business reading your article will never understand how it really works.

Yours etc, Giorgio Denaro,
Alpina Shipping, Istanbul, Turkey