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Chinese court enforces order on Crown Ocean Shipbuilding to pay salaries

Chinese court enforces order on Crown Ocean Shipbuilding to pay salaries
China-based Fujian Crown Ocean Shipbuilding’s continued delays in wage payments to its workers have prompted a local court to implement an enforcement order on the company to clear the salary arrears, reports said.

Due to a lack of business at the shipyard amid the severe shipbuilding downturn, Crown Ocean Shipbuilding has owed more than 180 workers in wages amounting to RMB6.7m ($1m), as well as other benefits totalling RMB1.1m, up until end-August 2015, according to a local media report.

Lin Cailong, chairman of the Chinese shipbuilder, was reported saying that the company hopes to pay out part of the owed wages before Chinese New Year on 8 February.

“We aim to gradually pay all our workers within this year,” Lin told reporters. “We hope the government will lend us financial support and implement the right policies to help development shipbuilding business.”

In response to Lin’s request, a local government source said the shipyard’s case has been alerted to the relevant authorities. “In cases where companies are unable to pay their staff, the government can allocate the companies to pay security deposits which will be used to cover wage arrears,” the government source was quoted saying.

In its heyday in 2008, Crown Ocean Shipbuilding sat on an orderbook of 36 newbuildings worth a total of RMB7bn.

In 2011, the shipbuilder started to face financial instability, leading to a 2012 protest by yard workers over unpaid salaries. In October 2013, the shipbuilder ceased operations but it did not file for bankruptcy.

The company struggled along and in July 2014 it leased part of its shipbuilding facilities to Mawei Shipbuilding to construct ship blocks and in September 2015 leased another part of its facilities to a subsidiary of China Railway Engineering to build steel structures.