Firm wants Karuturi Flowers wound up

The Star (Nairobi) | 7 September 2013

Firm Wants Karuturi Flowers Wound Up

By Constant Munda

A manufacturer of a cartons and polythene bags has applied to the High Court to wind up cash-strapped flower firm, Karuturi.

Allpack Industries, a member of IPS Group of Companies which is part of the Aga Khan Fund for Economic Development, wants the Naivasha-based company closed for alleged failure to honour its financial obligations. The firm filed the case at Milimani Commercial Court on August 7, according to a Kenyan gazzette supplement yesterday. The court is scheduled to hear the case on 25th October.

Creditors or contributories who would like to either be enjoined in the petition or oppose it have until October 24 to serve the lawyer for Allpack-Dally & Figgis Advocates. They will thereafter be expected to appear in person or through their advocates during the court hearing. The flower farm has since last year been grappling with financial challenges that has seen over 3,000 employees down tools on two occasions in the recent past.

The latest industrial action was staged early last month. As it was the case last December, the workers complained of non-payment of their wages as well as deplorable working conditions. The firm has also ran into trouble with Kenya Revenue Authority for tax evasion charges. The case with KRA arose late last year when Indian-based Bangalore, which is its affiliate, was found guilty of shipment transfer mispricing.

This led to an estimated loss of Sh962 million($11 million) in corporate income tax to the revenue agency. It however appealed the KRA's decision on April 11, this year. The troubled company produces about 580 million roses annually from its large farms locally, in Ethiopia and India. Reports indicate the company has acquired long term rights to more than 300,000 hectares of fertile farmland in Ethiopia since 2009 as it seeks to expand into large scale farming there. Our efforts to contact the Secretary General of Cotu Francis Atwoli, on the action the workers would take were unsuccessful as his phone was off. Atwoli is also secretary general of Kenya Agricultural and Allied Workers Union.
Original source: The Star

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