Green light for Stanbic to sell Karuturi assets to recover its debt

Greenlight for Stanbic to sell Karuturi assets to recover its debt

The Court of Appeal has given Stanbic Bank an okay to sale some assets belonging to Naivasha-based Karuturi flower farm together with those of its guarantors Surya Holding Limited and Rhea Holdings Limited to recover its debt.

This is after the court dismissed an appeal against an earlier court ruling that allowed the sale with suits on Friday.

By way of this appeal, the Shareholders of Karuturi, which is in liquidation, had sought to prevent the sale of the company’s assets, and those of its guarantors, to repay debts owed to its secured creditors.

In December 2010, Karuturi Limited had secured lending from Stanbic Bank Kenya Limited amounting to KSh227 million and further lending of US$3,855,060 about two years later in January 2013.

The debt was contested by the shareholders in the High Court, which in January 2018 granted a go-ahead for the bank to sell the company’s assets in the event its directors defaulted on making payment in respect of the amounts set out in an order within the prescribed periods.

The directors defaulted, paving way for sale of the assets, through the receivers, to recover the amounts determined as owed by the court. The appeal which was dismissed today was against the January 2018 ruling from the High Court.

“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 now resume the process of disposing of the assets of Karuturi covered by the Bank’s debenture, with the Bank concurrently progressing the disposal the land under legal charges.