CFC Stanbic Bank received a major blow on Tuesday after the High Court stopped its effort to have assets aligned to Karuturi sold.
The bank has kicked off the process of auctioning the Karuturi assets following a bank loan that the flower firm says has been doubled without their consent.
High Court Judge Justice Francis allowed CFC Stanbic receivers to continue evaluating the Expression of Interests proposals from applicants but not sell the assets as earlier advertised.
“…the process of evaluation of expression of interest that may have been commenced by the Defendants shall proceed but no sale of the assets shall be concluded until 14th June 2018, when the parties herein are due to appear before the court of Appeal in respect to the application under rule 5 (2) of the Court of Appeal Rules,” read the court order issued by Justice Tuiyott.
CFC Stanbic, through its receiver managers on May 2 advertised for the sale of some of the movable assets which include 14,00 greenhouse irrigation equipment, generators, cold storage units, farm tools, motor vehicles and IT equipment.
Karuturi saw the move to advertise for the sale of the asset as prejudicial and contempt of court as it had already lodged an appeal against the decision of the High Court made on 19th January 2018 that gave the bank the green light to auction Karuturi assets if the owners fail to clear Sh1.8 billion debts owed to the lender in 90 days.
Karuturi, through Phoenix Group, has made public intent to repay CFC’s original debt of USD 4.04 million plus reasonable interest. However, they accuse CFC Stanbic of irregularly demanding for USD 24 million amounting to 600percent of the loan advanced.
Here is the Judge’s directive: