The Court of Appeal has today given the go ahead for Stanbic Bank Kenya to auction the assets of flower firm Karuturi Limited together with those of its guarantors Surya Holding Limited and Rhea Holdings Limited to recover their debt.
The Court of Appeal dismissed an appeal against an earlier court ruling that allowed the sale of the Karuturi’s assets.
The fall of a flowers giant: The case of Karuturi vs Stanbic Bank
Karuturi applied for and received a loan of Ksh. 259,000,000 (USD 2,590,000) from Stanbic Bank which was disbursed on 27th December 2012. The flower company defaulted on the loan in 2013 which led the bank to appoint receiver managers. The bank then lent the company more money to keep the business afloat which, added with interest & penalties, made the loan amount to balloon to Ksh. 1,572,618,660 (USD 15,726,186.60) by 2018. The High Court in March 2018 had given the bank the go ahead to sell Karuturi’s assets should its owners fail to settle the debt within 90 days. However, Justice Francis Tuiyott in May 2018 stopped the bank from going ahead with the sale of Karuturi assets until the case filed by Karuturi was heard.
“The decision of the court will allow for the conclusion of the sale process that had commenced before the filing of the appeal,” said Muniu Thoithi, one of the Joint Receivers.
With the decision by the Court of Appeal, the Receivers will now resume the process of disposing of the assets of Karuturi assets to recover the debt owed. Muniu and Muchiru from Price Waterhouse Cooper (PWC), were appointed as receivers in April 2016.