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Top Tankers replies to critics over accounting wrong-doing

Monday, 26 March 2007 | 13:02

In a much sought interview, Hellenic Shipping News managed to attain the official views of Top Tankers President, CEO and Director, Mr. Evangelos Pistiolis, on the recent issue regarding the lawsuits against the company, mostly

Β In a much sought interview, Hellenic Shipping News managed to attain the official views of Top Tankers President, CEO and Director, Mr. Evangelos Pistiolis, on the recent issue regarding the lawsuits against the company, mostly from smaller investors. The Hellenic shipping company, one of the biggest case-studies, since its more than successful IPO in July of 2004, recently got caught in a law fight with small investors, over the accounting methods followed in the sale & leaseback of 13 vessels it carried out during 2006. ''The company will try its best to get the case dismissed and prove that the lawsuits are completely unjustified. In any event our primal aim is to save time and money and in order to focus on management and further expansion'' says Evangelos Pistiolis, CEO of the company.
In 2006 TOP Tankers paid a total of $217.5 million in dividends. Of this amount, $86.7 million was distributed from current and accumulated earnings and $130.8 million was distributed as a return of capital.
Recently, the company had to face the outbreak of the resignation of its independent auditors Ernst & Young, disagreeing with some accounting aspects of the sale and lease-back of 13 vessels. Since then, a series of lawsuits have been filed against Top Tankers, mainly by shareholders. Which is the company's stance in the matter?
We had a disagreement with the auditors. The Company had proposed a treatment for a small part of the Sale & Leaseback ($55m out of the $550m). The auditors had accepted our proposal and signed off 2 interim financial quarters. However, they changed their mind at a later stage and requested us to restate. We disagreed and eventually the relationship broke off.
As for the shareholders complaints, when a company announces a restatement in the US, it seems that it is a standard practice in the quite common a number of law firms, so called ''ambulance chasers'', to convince small investors to sue companies for damages. We have hired one of the best litigation law firms to represent us. Our Company in is sufficiently insured to cover any potential expenses.
Will Top Tankers try to reach a settlement, or are these lawsuits fully unjustified?
The Company will try its best to get the case dismissed and prove that the lawsuits are completely unjustified. In any event our primal aim is to save time and money and in order to focus on management and further expansion.
Are you considering offering some kind of compensation to your investors, i.e. through increased dividends?
The Company has already paid one of the highest returns of capital to its sharholders. Since our IPO in July 2004, we have paid $8.80 in dividends, which is 80% of the IPO price, We shall keep doing our best in order to keep our investors satisfied.
Which was the scope of the sale and lease back deal in the first place? Was it to achieve more liquidity in order to finance future fleet expansion?
Our goal was to capitalize on the strong market values of the vessels, maintain operational and commercial control of the fleet and pay significant dividend to our shareholders.
Is the appointment of Deloitte as the new independent auditors of the company going to help the situation, securing transparency in the company's financial statements?
The company has reported an audited financial statement earlier this month. Despite the increased scrutiny caused by E&Y's resignation, the new auditors did not have any difficulties in understanding our accounting and have found everything in order.
Since Top Tankers entered NASDAQ, in perfect timing one would say, it quickly became one of the hottest commodities in the market, practically paving the way for a number of shipping companies to also list their shares. Maybe this success spurred today's fierce reaction, since Top Tankers IPO was considered as a case study in the market?
It is true that the TOP Tankers model was followed by most shipping companies that listed in the US in 2004-2006. We do not believe that anyone has any reason to react fiercely against TOPT. In any event the opportunities within the shipping industry are enormous and everyone who was to be creative at the right timing and with hard work can achieve his aims.
Which are today's prospects of the company in terms of increasing profitability and fleet expansion? For example we've noticed a number of moves recently, involving new buildings and new charters.
Our aim is always the continuous expansion of theis to further expand our company and to continue to create the creation of shareholders value when we feel is the right time. Once again, I would like to thank you for giving me the opportunity to shortly express my views and I would like to congratulate you for the good work you are doing at this shipping portal by giving all these news and information to the shipping community without any unnecessary comments and speculations.

Nikos Roussanoglou, Hellenic Shipping News

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