CfC Stanbic Bank, Receivers meet Karuturi employees over terminal dues

Karuturi Limited receivers and liquidators met Karuturi employees Thursday over the closure of the Company’s operations today following the Winding up Order issued by the liquidation court on 30^th March.

The High Court Judge Charles Kariuki on March 30 this year issued the winding up orders for the company after the directors of Karuturi indicated to the Court that they did not oppose the petition for winding up that had been brought up by a creditor of the Company. On April 6, the Court appointed Muniu Thoithi and Kuria Muchiru as liquidators pending further direction of the Court.

“We regret to inform you that the Company will cease its trading activities today Friday, May 6^th, 2016 following thewinding up order. Following a Winding Up Order, a Company can only operate or carry on its business in so far as may be necessary for the beneficial winding up thereof, and with permission of the Court. As such, the closure of the operations is the inevitable consequence of the order”, said the receiver and interim liquidator Mr Muniu Thoithi.

The Liquidators had obtained some special permission of the Court to continue certain aspects of the business of the Company, such as the cutting and selling of flowers up to 5 May 2016 for purposes of an orderly winding up of the Company. Beyond 5 May 2016, the liquidators had no mandate to continue the operations of the Company hence the closure.

The Receivers and Liquidators are aware of the impact this inevitable closing will have on employees of Karuturi and the surrounding environment and will continue exploring the best options with the interest of all the stakeholders, including the workers at heart.

“The Receivers appointed by the bank over the assets of the Company will remain in place and will, subject to such directions that the court may issue, exercise powers they have over the assets of the company.  As previously advised, closure of the farm and sale of the assets is an inevitable consequence of a winding up order. It is our hope that a new investor will be identified to purchase the Company’s assets and potentially create employment opportunities in the future.” added Muniu.

CfC Stanbic Bank placed Karuturi under receivership in February 2014 after the flower firm defaulted on repayment of its loan, in addition to failure to meet its financial obligations to key suppliers resulting in the winding up petition being brought against the Company in August 2013 that culminated in the eventual winding up order of 30^th March 2016. The bank has continued to support operations at Karuturi during the receivership period by providing more lending to pay salaries and other operational costs in the hope that the company would be sold as a going concern which would have ensured an uninterrupted transition prior to the winding up order.

The over 2400 employees now face an uncertain future as the search for an investor is stepped up in the hope that the company will be bought as a unit and the operations resume at the earliest opportunity.