The Court of Appeal has given way for all charged assets of flower farm Karuturi Limited to be sold.
This includes those of its guarantors Surya Holdings Limited and Rhea Holdings limited.
The ruling follows dismissal of an appeal against an earlier court ruling that allowed the sale.
In the appeal, the firm had filed a contempt of court case against Stanbic Bank Kenya for initiating expression of interest process for the company’s assets.
Karuturi accused the bank of irregularly demanding $24m (Sh2,433,600,000 ) from the farm which amounts to 600 per cent of the loan advanced.
In December 2010, Karuturi Limited had secured lending from Stanbic Bank Kenya Limited amounting to Sh227 million and further lending of $3,855,060 ( Sh390.9 million)about two years later in January 2013.
The debt was contested by shareholders in the High Court, which in January 2018 granted a go-ahead for the bank to sell the company’s assets.
This was only in the event its directors defaulted on making payment in respect to the amounts set out in an order within the prescribed periods.
The directors defaulted, paving way for sale of the assets, through the receivers, to recover the amounts determined as owed by the court.
Karuturi was put under receivership in 2014 after failing to pay the loan borrowed from the bank.
On May 2, the receiver managers advertised the sale of some of the firms’ movable assets. This included motor vehicles, IT equipment, farm tools, cold storage units greenhouse irrigation equipment, and generators.
However, in the same month, the owners of the Naivasha based flower firm moved to court to stop the receiver manager from selling part of the company’s assets.
By way of this appeal, Karuturi shareholders sought to prevent the sale of assets to repay debts owed to its creditors. This even as over 3,000 former workers held demonstrations to protest the move to sell the assets without first paying their dues.
In June last year, the employers appealed to the government to facilitate their benefits after the company was put under receivership.
They called on Treasury, Central Bank of Kenya, Kenya Revenue Authority and the Ethics and Anti-Corruption Commission to probe Stanbic Bank. They accused the bank of advancing loans to the firm’s receiver managers even when it had become clear they would not repay
“The decision of the court will allow for the conclusion of the sale process that had commenced before the filing of the appeal,” Administrator Muniu Thoithi said.
