Naren Patel and Ravi Patel of Subati Flowers. PHOTO | COURTESY
Summary
- Latest reports indicate that Subati Group has acquired six parcels of land in the Nyandarua/Ol Joro Orok area and the crop of flowers thereon from Suera for an undisclosed sum.
- The information is contained in a Kenya Gazette notice published by lawyers representing Suera and Subati.
- The notice says Subati, which is owned by businessman Ravi Patel and Naren Patel, will continue the business of the newly-acquired properties (flower farming).
Former Co-operative Bank managing director Erastus Mureithi’s
Suera Flowers has been sold to rival Subati Group, marking the beginning
of asset disposals aimed at settling the businessman’s Sh1.6 billion
debt.
Latest reports indicate that Subati Group has
acquired six parcels of land in the Nyandarua/Ol Joro Orok area and the
crop of flowers thereon from Suera for an undisclosed sum.
The information is contained in a Kenya Gazette notice published by lawyers representing Suera and Subati.
“Notice is given under the transfer of Business Act, that Suera
Flowers Limited (the transferor), has pursuant to an agreement for sale
dated August 31, 2018 sold properties … together with the assets thereon
which include the crop of flowers to Subati Group Limited,” the lawyers
said.
The title numbers of the properties are given as 8421, 8420, 12, 1489, 1225, 11994.
The
notice says Subati, which is owned by businessman Ravi Patel and Naren
Patel, will continue the business of the newly-acquired properties
(flower farming).
Mr Mureithi told the Business Daily
that Suera is not being sold in its entirety, adding that the company
will retain part of its operations. He, however, declined to reveal the
price at which the six properties were sold and the size of the
operation Suera will retain.
The latest transactions
effectively expand the business of Subati, which is one of the largest
flower growers and exporters in Kenya. The company grows rose flowers on
some 80 acres in Nakuru and Naivasha, producing 750,000 stems of 12
different varieties per month.
Subati exports its flowers to more than 40 countries in Eastern
Europe, the Middle East and Australia. Besides Subati, other major
players in the industry include Oserian, Fontana and Kisima.
Sources
told the Business Daily that the sector now favours the big companies
that are able to achieve economies of scale at a time when costs are
rising.
Smaller firms, in particular, are feeling the
pinch of increased competition from countries like Zimbabwe and
Ethiopia, which subsidise their farmers. The sale of Suera properties
was spearheaded by Garam Investments Auctioneers, who were hired by a
local bank that is also disposing of Mr Mureithi’s other properties,
including residential houses, office buildings, greenhouses with
horticultural crops, water pans and cold rooms. It was not immediately
clear how far the asset disposals have gone.
Mr Mureithi’s eight units of four-bedroom houses in Nairobi’s
upmarket Karen estate were also put up for sale in a past notice and
were expected to fetch some Sh960 million.
An 89-acre
prime agricultural land on the Nyahururu-Ol Kalou Road was to be sold
for Sh393 million. Most of the assets are in Nyahururu.
Mr Mureithi jointly owns the flower firm with his wife Susan.
The
businessman, who quit employment as Co-op Bank’s chief executive in
2001, has in the past fought a legal battle with Kenya Revenue Authority
(KRA), which demanded Sh25 million in a claim that related to his job
at the bank.
The taxman had raised issues with the
bank’s calculation of taxes on benefits Mr Mureithi enjoyed such as
motor vehicle allowances, insurance premiums, fees and air fares to the
UK and the US as well as security guard services at his home.
Trouble
deepened in March 2003 when his former employer, Co-op Bank, sued him
after settling his tax liabilities. The bank argued that it was Mr
Mureithi’s responsibility to ensure his personal tax compliance and not
the company.
Mr Mureithi joins a growing list of
businessmen who have lost the empires they built on debt. Several banks,
for instance, have auctioned companies of the late businessman Twahir
Sheikh Said (TSS) to recover their loans estimated at more than Sh3
billion.
Nakumatt Holdings, founded by Atul Shah, went
into administration after defaulting on more than Sh20 billion of bank
and supplier debt.
Besides unique challenges facing
individual companies, the rise in bank-mandated auctions has been
attributed to a tough business environment including difficulty in
refinancing old loans.
Former Co-operative Bank Managing Director's land set for auction.
| Description | Size (Acres) | Value (Sh million) |
|---|---|---|
| 5 Km before Nyahururu town, with 2 and 3 bedroom units. | 31.0 | 37.2 |
| 5.5 Km from Nyahururu town with a flower grading block. | 27.0 | 84.0 |
| 5.5 Km from Nyahururu town, with 3-bedroomed house. | 18.0 | 53.0 |
| Adjacent to Nyahururu airstrip, developed with greenhouses | 9.0 | 25.5 |
| Along the Nyahururu-Olkalau road opposite Hashi petrol station. | 89.0 | 393.0 |
| Eight units of 4-bedroom houses each in Karen. | 0.0 | 960.0 |
| Land near the Nyahururu airstrip. | 5.0 | 4.1 |
| Land with semi permanent green houseses, south of Nyahururu town | 2.0 | 5.7 |
| Near Nyahururu airstrip with a canteen and 41 single rooms. | 8.0 | 6.4 |
| Others | 9.0 | 16.1 |
| Partly undeveloped with a tissue culture house, near Nyahururu airstrip. | 7.0 | 12.0 |
| Total | null | 1,654.0 |
| Undeveloped landwith a tissue culture house, west of Nyahururu town | 50.0 | 57.0 |
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