Time to Crack Down on Management
Shipping has always been a little shady. A couple of years of good markets forgave all sins, but as the market enters the next phase of the post COVID boom, is it time for accountability?
Stamatis Molaris should be in jail. Fullstop. This man pushed his luck too far, went against the long arm of the law and lost, twice. Allowing him to have a role in the shipping community is a stain which should be rectified immediately.
Shipping operates in the grey area of World commence. We get that. Nation states have spats, there are uni-lateral decisions which can come out of nowhere which can impact ones business. We see this over and over again with the United States, who decided to up-end the global tanker market by putting sanctions on Russia. To a lesser extent, they have done this with Iran and Venezuela. Ever shifting policy and actions, like providing billions in payments to Iran, but saying anyone who carries their oil is a criminal.
It is what it is and sometimes it doesn’t make sense. You also have incidents like when Trafigura paid a group to take care of their chemical slops and that group dumped it in a pond, poisoning a bunch of people. Or the old days of Marc Rich trading both sides of conflicts or more modern examples of certain public companies having exclusive contracts with certain South American countries rife with corruption who pay multiples of market value.
Shipping exists to move product and we generally think they should be able to do business around the World without having to deal with nation state spats, but that is not the reality we live in.
So what did Empire Navigation CEO Stamatis Molaris do?
Last year he had a ship called the Suez Rajan that loaded Iranian oil off Singapore. It is unclear if they knew the origin of the cargo, but given the type of operation one could assume they had an idea. This ship was ultimately arrested and transported to the US Gulf where the US Government confiscated the cargo. Molaris pled guilty to “conspiring to violate the International Emergency Economic Powers Act (IEEPA).”
Empire Navigation, the operating company of the vessel carrying the contraband cargo, agreed to cooperate and transport the Iranian oil to the United States – an operation which has now concluded. Empire Navigation incurred the significant expenses associated with the vessel’s voyage to the United States
Empire Navigation agreed to cooperate with the US Government and paid a fine of $2.4 million.
And this is not even his first encounter with the US Justice Department. Tradewinds reported in January 2023 that Molaris paid a separate $2M fine for tampering with pollution equipment onboard. Fool me twice…
But this is where it gets interesting. Most rational actors after having their vessel seized by the US Government would consider rehabilitating their image. And they would have likely sold the ship in question and moved on, learning their lesson. But Molaris does not act rationally. Instead, he sold the ship internally to a new entity and renamed the vessel the “St Nikolas”. Ok so that is what it is.
But then he broke another industry norm and took his ship back to the Arabian Gulf. Typically after you lose an Iranian cargo you realize that the you messed up and the Iranians do not forget these things. So by taking his vessel back to the region, he directly put his vessel’s crew at risk as well as those tasked with patrolling the region. And risk he did. The vessel was seized by Iranian military personnel while transiting outbound.
The global maritime community must reject such brazen activity, it is a stain on our industry and a great risk to those who operate within it. Tradewinds wrote about the incident, but unfortunately did not cover any of the deceitful actions by Empire Navigation. Instead, they focused on the actions of Molaris to get in contact with his crew, putting him and his actions in a positive light.
Since his run-ins with the law, not only has Tradewinds not covered his role directly, other than reporting on the events, they have written positive stories on Empire Navigation’s business activities. Until our maritime journalists take these bad actors head on, there will be little social pressure for change.
The next part of our story will be covered later this week in Part 2, it will be for subscriber only (seems like a new industry trend), and while this story does not involve any directly fraudulent behavior, should be highlighted given the excessive nature and poor governance that it reflects. Stay tuned.
