CfC Stanbic Bank has appointed PricewaterhouseCoopers as the new receiver managers of struggling flower firm Karuturi Limited in place of Ian Small.
The lender announced last Friday that Kuria Muchiru and Muniu Thoiti will take over as joint receivers with immediate effect from Mr Small and Kieran Day, who took control of the flower firm in February last year.
The lender announced the changes in a memo sent out to all staff on Friday. CfC Stanbic put Karuturi under receivership after it failed to repay a Sh400 million loan. Karuturi is also battling Indian Bank ICICI over a disputed Sh1.7 billion loan.
“CfC Stanbic has appointed Mr Muchiru and Mr Thoiti as joint receiver managers of Karuturi Limited effectively replacing Mr Small and Mr Day. Your employment remains with the company under the terms and conditions of your existing contract of employment,” the memo to workers reads. Ian Small is said to be relocating to the Netherlands.
Owners of the struggling flower firm have been battling Mr Small and Mr Day over allegations that they were trying to waste away Karuturi.
The flower firm’s founders also claim that the two former receiver managers have on several occasions sabotaged attempts to sell Karuturi to investors.
Justice Francis Gikonyo in July ordered the two receivers to avail Karuturi’s books of accounts and the current status of the loans.
The last status report on the loans availed in November last year showed that its debt to CFC had grown from $4 million (Sh400 million) to $6.3 million (Sh648 million).
Karuturi’s fortunes changed following the 2007-2008 post-election violence, and the flower firm has struggled recovering from the fall.
Weak demand resulting from the European economic crisis and low shilling equivalent of dollar earnings also significantly narrowed the gap between expenses and revenues, discouraging farmers.
The suit between the Karuturi and CfC is still ongoing.