karuturi-boss-laughs-off-sale-of-his-flower-farm
Ramakrishna Karuturi has laughed off plans to sell off his Naivasha-based flower farm. This could turn out to be a disappointing anti-climax for creditors, who include CFC Stanbic Bank, which moved to court forcing the receivership of the farm, and which has now led to liquidation.
“I am hoping the liquidators can find someone to buy air,” Mr Karuturi told The Standard, adding, “there is nothing in there to be sold.”
In this statement, the 51-year-old founder and managing director believes there is not much left of the company. Its main assets, according to financial reports, are flower bushes and the greenhouses they are grown in.
Most of the greenhouses are not in the best shape, considering the financial troubles the firm has had that pushed it into receivership more than two years ago.
It would be difficult to draw any value from the flower bushes without the land, Karuturi said, laughing off the liquidation process that kicked off last week Friday.
The company owes CfC Stanbic about Sh383 million, making it the single-largest creditor and the biggest beneficiary in the intended liquidation to be executed by PricewaterhouseCoopers (PwC). Another creditor whose debts are unsettled is All Pack Industries Ltd, a Nairobi-based packaging firm.
Karuturi Ltd was once the largest rose grower in the world, producing flowers on vast land on the shores of Lake Naivasha.
The land and some of the agricultural equipment, however, belong to its sister firms Surya Holdings and Rhea Holdings — both 100 per cent owned by subsidiaries of Mumbai-listed Karuturi Global.
Several creditors are hoping the disposal of Karuturi’s assets, through the liquidation process, would offer them some recourse and settle debts that have been outstanding for years.
But the ‘smart’ company structure Karuturi has may see the owners of the flower firm suffer minimal exposure. Through its sister companies, the flower grower has in the past been accused by the Kenya Revenue Authority (KRA) of dodging taxes through the abuse of transfer pricing guidelines. In essence, Karuturi Ltd was a tenant of its sister companies, which in law exist as independent entities.
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