The court of Bengalore in India has started insolvency proceedings against Karuturi. This Indian company once wanted to become the largest rose producer in the world. However, it seems like this ambition has definitively come to an end now.
The court of Bengalore has prohibited the company to transfer, burden, sell or dispose any of its resources. They started the insolvency proceedings because Karuturi’s rose farm in India could no longer meet its financial obligations. There appears to be a debt of 11 million euros.
According to Indian newspaper The Hindu, India exports 100 million stems of roses to markets in the United Kingdom, West Asia, Australia, China and the Netherlands. More than half of these roses would be produced by Karuturi.
Never successful
Karuturi’s website states that they are still the largest rose grower in the world with a production acreage of 292 hectares and an annual production of 555 million stems per year. However, this information doesn’t seem accurate. Karuturi’s rose farms in Africa have never been successful. In fact, at their Ethiopian farms, the focus was shifted towards food production at an early stage.
Karuturi has also had problems with its rose farm in Kenya and the processing company in Aalsmeer.
Employees of the rose farm in Naivasha were on strike in 2012 and 2013, because of outstanding pay and poor working conditions. By the end of 2013, the chairman of the COTU union, Francis Atwoli, called upon president Uhuru Kenyatta to intervene in the interest of the employees.
Settlement
In 2013, Karuturi Global LTD was found guilty of tax evasion by the Kenyan government for an amount of 20 million dollars. According to the taxation authorities (KRA), the company systematically labelled their export roses with prices that were far too low.
At the end of 2013, Karuturi said in a statement on their website that they had agreed on a settlement with the Kenyan taxation authorities (KRA) and that they ‘only had to pay 4 million dollars’.
Karuturi Limited in Naivasha went into receivership in February 2014, because of a debt of more than €4 million and the non-payment of salaries to more than 3,000 employees. The Kenyan Business Advisory Group assigned two trustees to finalise the financial affairs. They investigated, among other things, the possibility of selling the rose company. The management of Karuturi no longer had control over the assets of the company.
Bankrupt
There were problems in Aalsmeer too. Karuturi’s rose processing company located within the grounds of the Royal FloraHolland auction, was declared bankrupt on 30 September 2014.
Karuturi processed and traded their roses from Kenya and Ethiopia in Aalsmeer. There had been problems at their nurseries for a long time, though. They didn’t supply any roses for many months.
An interesting detail is that last March, investment company Phoenix Group announced they wanted to invest in the Kenyan activities of Karuturi. The investment was to cover Karuturi’s debts and breathe new life into the rose farm in Naivasha. There is still a chance that Karuturi once will fulfil its ambitions.
