Court allows bank to run Karuturi
The bonfire that was lit by protesting Naivasha-based Karuturi flower farm workers who were demanding four months payment from their outstanding wages. They barricaded the busy South Lake road paralysing transport for several hours.
What you need to know:
Kenya’s leading flower exporter lost the battle of control after the High Court declined to stop receiver managers appointed by CfC Stanbic Bank from taking over the firm.
In Thursday’s ruling, Mr Justice Francis Gikonyo upheld the decision by CfC Stanbic to appoint agents to manage the 25-acre flower farm.
Kenya’s leading flower exporter lost the battle of control after the High Court declined to stop receiver managers appointed by CfC Stanbic Bank from taking over the firm.
On Wednesday, Karuturi moved to the High Court seeking to stop the CfC Stanbic-appointed Mr Kieran Day and Mr Ian Small, of the Business Advisory Group, from being the receivers and managers.
Karuturi Limited accused CfC Stanbic of acting in bad faith in placing it under receivership. The firm accused the bank of disregarding a court order that prohibited any creditors from interfering with the affairs of the company.
The order was issued in October following a winding up petition against All Pack Industries Limited who they owed money.
“Continued interference by CfC is intended to create bad publicity against the company with a view to influencing the court to issue adverse orders,” the firm stated.
DECISION UPHELD
However in Thursday’s ruling, Mr Justice Francis Gikonyo upheld the decision by CfC Stanbic to appoint agents to manage the 25-acre flower farm.
“I order that the orders made on February 11 appointing receivers and managers for the Karuturi flower firm be upheld,” the judge ruled.
CfC Stanbic is accusing Karuturi’s directors of fleeing the country to avoid liabilities.
The lender said Karuturi’s directors have a record of tax fraud and that junior local managers were steering the flower firm.
The Kenya Revenue Authority is demanding Sh962 million from Karuturi in taxes. The taxman said that the firm had been inflating the cost of seeds it buys from its subsidiaries and under-declaring the flowers it sends to its warehouse in Dubai.
