Bank of China

Laid off ferry crew face long pay wait

PUBLISHED : Tuesday, 11 October, 2011, 12:00am
UPDATED : Tuesday, 11 October, 2011, 12:00am

More than 60 crew who were made redundant following the collapse of ferry company Macao Dragon last month will be the first claimants to be paid after the sale of two ferries that were seized to pay outstanding debts.

The ships, the 2,440 gross tonne Shen Long and Tian Long, were arrested in Hong Kong by the Macau branch of the Bank of China on September 30 over two outstanding term loan facilities of HK$160 million.

Nigel Binnersley, a partner in law firm Blank Rome which is acting on behalf of the crew, said a protective action, called a caveat, was filed in the High Court late last week. The caveat was attached to the Bank of China's ship arrest warrants. Binnersley said the caveat 'makes us privy to anything to do with the ships' arrest' and allowed the crew to continue the action if the Bank of China dropped out for any reason.

The ships were arrested by Gallant YT Ho & Co on behalf of the bank. Asked to comment of the seizures, Amanda Liu Lai-yun, the firm's managing partner, said they involved confidential issues and declined to comment.

Binnersley said the crew members, who were last paid at the end of August, were owed HK$8.5 million in unpaid wages according to preliminary estimates. He confirmed the crew's claim puts them 'at the top of the list' even ahead of the Bank of China when proceeds from the sale of the ships are distributed.

Under court procedures the Bank of China's legal representatives have to apply to Hong Kong's Admiralty Court for an order for the ships to be valued and sold. Tenders will subsequently be invited and provided the highest bid beats the valuation the ferries will be sold.

Proceeds from the sale will be kept in an escrow account before they are distributed about 90 days after the ships' sale and after any other creditors have lodged claims.

Vyvyan Harris, a former Macao Dragon ferry captain, said: 'We are not going to see any money for a long time.'

Separately, Harris did confirm the ferry company's liquidator's had decided to pay the crew for the two weeks they worked after Macao Dragon went into liquidation on September 15.

Liquidators told the crew last week there was no money to pay them and they did not have a written contract even though liquidators earlier gave a verbal pledge and prepared a draft employment contract promising payment.

Binnersley conceded it could take up to five months before the crew were paid from the proceeds of the vessel sales. 'The vessels ultimately will be sold. The ships are a wasting asset pending sale,' he said.

But Harris commented: 'The bank seemed to be totally unconcerned about its assets' putting a single watchman instead of a crew on board each of the ships.

The ships, which can carry up to 1,200 passengers, are tied to buoys at government anchorages in the harbour's western approaches.

Macao Dragon acquired four high-speed catamaran ferries from Singapore's Marinteknik Shipbuilders, although only Shen Long and Tian Long were delivered and put into service.

Andrew Yeo, a senior executive in Marinteknik's technical department, said the two other ships 'still belong to the yard'.

He confirmed Hong Kong businessman David Liang Chong-Hou was chairman and a major shareholder in Marinteknik Shipbuilders. Liang was also a director and major shareholder in Macao Dragon and remained an executive director of New World Development.

Harris said Shen Long and Tian Long were originally built as vehicle ferries for a Spanish operator which did not take delivery. Instead, the ships were laid up in Singapore for two years. 'When he [Liang] could not sell them, he decided to use them on his own account' setting up Macao Dragon, Harris added.