Karuturi creditors asked to table claims ahead of firm’s sale
A worker in a flower farm. Karuturi was put under receivership in 2014 after it failed to meet its payments. PHOTO | FILE
What you need to know:
Creditors have until May 16 to table their debt claims ahead of the anticipated sale of the Naivasha-based flower exporter.
Kenya’s largest flower firm, Karuturi Limited, is set to be wound up, marking a dark chapter for one of the prominent growers.
Creditors of Karuturi have until May 16 to table their debt claims ahead of the anticipated sale of the Naivasha-based flower exporter.
High Court Judge Charles Kariuki on March 30 issued winding up orders and on April 6 appointed Muniu Thoithi and Kuria Muchiru as liquidators pending further direction on May 5.
“The implication of this winding up order is that the company was placed in liquidation from Wednesday March 30, ” the joint liquidators said on Thursday.
“Accordingly, creditors of the company are required to prove their debts or claims by completing Proof of Debt form number 61 in prescribed format provided by winding up rules number 81 to 88 and to establish any title they may have under the Companies Act (Cap 486), or, failing which they shall be excluded from the benefit of any distribution made before the debts are proved, or from objecting to any such distributions,” they further said.
The liquidators said the claim forms will be provided at Karuturi’s offices in Naivasha.
Karuturi, owned by an Indian multinational, went under in February 2014 after it faced cashflow problems and was placed under receivership.
The receiver later offered to put the firm on sale saying the business model was unsustainable. The Bangalore, India-based multinational had opposed a winding-up petition brought by the receiver managers.
However, this changed on March 30 when Karuturi lawyers filed a no-objection motion leaving Justice Kariuki with no option but to order for its sale.
“It is hereby ordered that there being no objection to the petition (winding up) herein, the same be and is hereby allowed as prayed,” Justice Kariuki noted in a ruling following a winding up petition filed by Allpacks Limited.
Karuturi has had a bumpy ride in recent years amid piling debts and rows over tax payments. Its troubles peaked in late 2012, when the Kenya Revenue Authority (KRA) began an audit of its cash and tax transactions which revealed that it used transfer mispricing to avoid paying the government nearly $20 million (Sh2.1 billion) in corporate income tax.
Karuturi also had a stand-off with CfC Stanbic Bank over a Sh383 million debt that saw the bank put the flower firm under receivership in early 2014.
The lender took over Karuturi’s operations and said it would sell off the land its flower farms sit on — which had been given as security.
However, the firm’s management protested the move, saying the land, valued at Sh8.2 billion, is worth much more than the loan amount.
CfC appointed receiver managers from The Business Advisory Group after Karuturi failed to meet its monthly wage bill and fell behind on payments to creditors.
Mr Kieran Day and Mr Ian Small, the receiver managers, had earlier hinted at possible sale of the firm to other investors and in January invited bidders for expression of interest in acquiring the business and assets and set a deadline of February 28.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
