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From grace to grass, sad tale of wilting Karuturi flower farms

RIFT VALLEY
By Antony Gitonga | August 16th 2021

Some of the greenhouses in the Naivasha-based Karuturi flower farm which was put under receivership seven years ago leaving over 3,000 workers jobless.[Antony Gitonga,Standard]

From a distance, rows of greenhouses dot the lakeside town of Naivasha.

Located next to the freshwater Lake Naivasha, dozens of workers in Karuturi flower firm’s s harvest, cart and pack thousands of roses for the Dutch auction market.

The workers share jokes as their children happily play at a nearby primary school and a day-care centre managed by the flower firm.

In the nearby ‘Old Trafford’ stadium, the company’s football team is in high spirits as it prepares to fly out for an international match to represent the country.

For traders along the Moi South Lake Road, business is booming, with more than 3,000 workers employed by the firm that produces a million stems of roses every day.

But that was long ago...former workers here can only wish they could change the hands of time.

Fourteen years down the line, the greenhouses are collapsing, the daycare centre has closed down and the multimillion shilling Sher Hospital now reduced to a shell.

The stadium that was once ranked the best is underwater. Even the goalposts have since collapsed. Pain and poverty is etched on the faces of the hundreds of workers from the once giant rose flower grower.

In the lined workers’ quarters, raw sewer, heaps of garbage, falling bathroom doors, dirty and emaciated minors welcome visitors on this sunny dusty day.

Inside the greenhouses lie withered plants, torn nylon papers, stalled pumping machines and disillusioned guards.

For the Karuturi flower firm, it is a story of glory to gory after the Supreme Court gave the nod to a local bank to auction its assets to recover a debt. The move has dashed the hopes of former workers, traders and unionists, even as plans to dispose of the assets of the firm kicked off.

But where did the rain start beating the firm once touted to be the world’s leading producer of roses?

In 2007, the Karuturi, then under Sher Agencies, changed hands from a Dutch investor Gerrit Barnhoon to the Karuturi family in a €50 million (Sh6.4 billion) deal.

“This is to confirm that the ownership of Sher Agencies Ltd has changed and the new owners are Karuturi Sai Ramakhrishna and Karuturi Srinivas Rao,” read a statement.

The new owners promised goodies for the workers and the community with a commitment to improve their working and living conditions.

But before the dust could settle, a land dispute erupted between the new owners and a neighbouring over the ownership of a parcel that had been sold to them.

The lost control of the estimated 12 acres after a court battle, as new foreign managers started filling in positions on the firm.

The move did not augur well with the management, leading to the exit of some of the firm’s experienced staff. This adversely affected production. What followed was a massive shake-up that saw expatriates, mainly from India, being brought in to manage the firm, but things only got worse.

 Losing its position

With time, Karuturi began losing its position in the international market as production continued to dwindle and labour unrest became the order of the day.

Soon, the Kenya Revenue Authority was on its neck and took them to court for tax evasion of Sh500 million, while some banks and suppliers moved in to demand their dues.

In 2014, the firm’s woes deepened after it was placed under receivership before the final nail on the coffin was hammered last month.

The Supreme Court gave Stanbic Bank the go-ahead to sell Karuturi’s assets to recover more than Sh1.8 billion loan.

In the court case, Surya Holdings Ltd and THEA Holdings had moved to court arguing that they were denied the opportunity to challenge the contents of the audit report by Deloitte Consulting Limited.

However, a five-bench-judge ruled that there was no issue of a constitutional nature, for the court to determine in the dispute.

And as the full effects of the court ruling sink in, workers, unionists and local leaders have expressed concern over the fate of the once floriculture giant. According to Kamau Njuguna, a director with the East Africa Chamber of Commerce, the move to sell the firm’s assets was a major blow to the county’s economy. Kamau narrates how traders camped along Sher Estate every week targeting the hundreds of workers during the ‘s rosy days.

“Over 3,000 workers lost jobs, meaning those who relied on them, directly and indirectly, were affected and the move to auction the ’s assets marks the darkest period for the county,” he said.

Rosebel Atieno, a former worker at Karuturi, says they learnt of the plans to sell the s’ assets through the media. She tells of the agony the workers have suffered, as they waited for the firm to either pay them or resume operations. “We don’t know what is going on or if we shall be paid as the bank or the auctioneers have not gotten in touch with us,” Atieno says.

She has called on COTU Secretary-General Francis Atwoli to come to the workers’ rescue so that they are compensated from the sale of the firm’s assets.

Samson Auda, a former shop steward at the firm, says they are owed more than Sh300 million in salary arrears, union dues and savings.

He terms the court ruling a shocker, as the owner had shown interest in paying the debts that he owed the bank and other institutions.

“All we ask is our dues, which many struggled for over 30 years to earn,” he said.

Kenya Plantations and Agricultural Workers Union, through its Naivasha branch secretary Ferdinand Juma, says they are keenly studying the court ruling.

He terms the move to auction the ’s assets as a major blow to the sector and to hundreds of the workers who had for years followed keenly the court case.

“We fully respect the court’s decision and at the moment we are keen to make sure that workers get their rightful dues just like other institutions that were owed by the firm,” he says. 

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