Flower farm Karuturi put under receivership
What you need to know:
- The receiver managers will seek a way out of the financial troubles but also hinted at possible sale of the firm to other investors.
The Kenyan subsidiary of the world’s biggest producer of cut roses has been put under receivership for failure to pay debts.
Naivasha-based flower farm Karuturi Limited was put under receivership on Monday and The Business Advisory Group appointed the receivers managers.
The Indian-based Bangalore subsidiary is in red for at least Sh400 million owed to CFC Stanbic Bank and other creditors.
Kenya Revenue Authority is demanding Sh962 million alleged tax evasion charges after the firm was found guilty of transfer mispricing.
Failure to pay salaries
Mr Kieran Day and Mr Ian Small, the receiver managers said part of the reason for placing the firm under receivership was the failure by the company to pay salaries, which is three months in arrears, and the slow payment of trade creditors which is adversely affecting flower producers in the area.
The receiver managers will seek a way out of the financial troubles but also hinted at possible sale of the firm to other investors.
“We are in the initial stages of assessing the state of Karuturi’s business. Over the coming weeks we shall be working hard to fully analyse the company’s financial position and agree on the best course of action. Already, we have received enquiries from parties interested in acquiring Karaturi’s business and assets,” Mr Day said.
In December, Cotu secretary general Francis Atwoli appealed to President Kenyatta to intervene over workers plight after his letter to Cabinet Secretary of Labour Kazungu Kambi went unanswered.
He claimed the 3,000 staff at Karuturi who had gone on strike several times were working without water and electricity.
He claimed the farm owners were involved in siphoning cash to overseas destinations.
Malicious claims
Karuturi Group chairman and managing director Sai Ramakrishna Karuturi, however, termed the allegations as “false, malicious and alarmist".
A manufacturer of cartons and polythene bags, Allpack Industries also took the firm to the High Court asking that it be wound up for failure to pay its debts.
According to company sources, its production is about 580 million roses every year on its farms in Kenya, Ethiopia and India.
