Companies

Karuturi spared auction in debt row with tour operator

karuturi

Karuturi workers spray flowers. The firm's receiver managers successfully moved to court to obtain the temporary orders restraining attaching of its property. PHOTO | FILE

Troubled Naivasha-based flower company Karuturi Limited got a reprieve after the High Court in Nakuru stopped auctioneers from attaching its property over a Sh500m million debt.

Justice Janet Mulwa issued a temporary injunction restraining Nasioki Auctioneers from attaching property at the cash-strapped firm’s offices pending hearing and determination of a suit by a local tour operator, Crayfish Camp.

The tour company claims to be owed the amount in land rent arrears accruing from January 2009.

Crayfish Camp through its director Serah Nyambura had sued the company’s subsidiary Twiga Roses over the unpaid rent arrears.

However, Karuturi Limited’s receiver managers successfully moved to court to obtain the temporary orders restraining attaching of its property.

In an affidavit sworn in court on October 23, 2014 by Mr Patrick Ndung’u on behalf of the company’s receiver managers, the flower firm said it is still clearing rent and other cash it owes suppliers and other creditors prior to the receivership period.

They have indicated in court that they are ready to pay the amount in instalments of Sh400,000 per month, a position that has been sharply opposed by the petitioner.

Lawyer Steve Biko for Crayfish told the court that in 2006, his client leased a parcel of land to Kalasha Holdings Limited, which illegally leased out the property three years later to Karuturi Limited.

He said that since then Karuturi Limited has not been paying the rent and instead has continued with its normal operations on the land.

Top grower

Crayfish, in court papers, said that the flower company’s receiver managers have been reluctant to pay the debt incurred five years before the company was put under receivership.

Karuturi Ltd, one of the world’s top growers of cut roses exporting more than one million stems annually, was put under receivership on February 10,2014 after failing to service a Sh383 million loan borrowed from CfC Stanbic Bank.

Kieran Day and Ian Small Lawson of the Business Advisory Group were appointed as receiver managers of the firm.

Apart from CfC Stanbic Bank’s loan, the Kenya Revenue Authority (KRA) is also demanding Sh962 million from the firm over alleged tax evasion through transfer pricing.

Another company, All Pack Industries Limited, is also pushing for recovery of debts of undisclosed value.

The court slated hearing of the case for January 18.