An unhappy Valentine's Day for some - Karuturi, the iconic landgrabber, flops

Tax Justice Network ▪ Forum Syd Kenya ▪ GRAIN ▪ Anywaa Survival Organisation ▪ South Indian Coordination Committee of Farmers Movements

Karuturi Ltd, the Kenyan flower production unit of Karuturi Global, is in financial collapse and been put under receivership. One of the world's most infamous landgrabbers is in its deepest trouble yet.

On 11 February 2014, CfC Stanbic Bank in Nairobi took over the Karuturi farm in Naivasha while management was assigned to The Business Advisory Group Ltd. The new managers will assess the true financial situation of the firm, which has stopped paying its workers, suppliers and utility providers since many months, and settle the company's outstanding debts, which reportedly exceed US$ 5 million. Until now, the flower farm in Naivasha was its cash cow, responsible for three-quarters of the Karuturi empire's annual global earnings.

Bangalore-based Karuturi Global Ltd is one of the largest foreign agribusiness conglomerates in Africa. In 2007, it began expanding its operations to Kenya and Ethiopia to take advantage of generous tax breaks and cheap land, water and labour. It soon became the world's largest cut rose exporter and acquired over 311,000 ha of fertile land in southern Ethiopia for food production.

Now, this leading example of foreign direct investment in African agriculture is on the verge of collapse -- and Africans are paying the price.

Karuturi's overseas business ventures are causing untold suffering. In Kenya, the workers have been living in inhumane conditions without pay, water or electricity since months. In the last six months, their medical services have been shut down and the school for their children has been closed.[1] On top of this, Karuturi owes the Kenyan government millions of US dollars in unpaid taxes that it hid through doctored invoices and transfer pricing.[2]

In Ethiopia, the Anywaa and other communities that were violently displaced from their lands without consultation to make way for Karuturi's farming operations have lost their livelihoods and been living in exile without proper compensation. Karuturi, however, has been unable to cultivate more than a small fraction of those lands and local sources report that the farms have stopped operations. Last month, the Ethiopian government issued a warning to Karuturi to clarify the standing of its agricultural investment project or see its permit withdrawn.

From tax fraud to labour violations, Karuturi must pay for its crimes, immediately. And the international community must stop supporting such egregious corporate malfeasance in the name of "foreign investment", or worse "development".

Notes:

[1] See our accompanying backgrounder for the details: http://tinyurl.com/mveztag

[2] See our media release ("Karuturi guilty of tax evasion") and backgrounder ("A litany of trouble") of 22 April 2013: http://tinyurl.com/koqccth.

For more information:

▪ Mr Stephen Gichohi, stephen.gichohi@forumsyd.org, +254725401366, or Ms Mukami Kowino, +254722436802, mukami.kowino@forumsyd.org, Forum Syd Kenya, Nairobi (on the Karuturi farm workers situation & the campaign against transfer mispricing in Kenya)

▪ Mr Devlin Kuyek, GRAIN, Montreal, devlin@grain.org, +15145717702 (on Karuturi & global land grabbing)

▪ Dr Attiya Waris, Law School, University of Nairobi, attiya@uonbi.ac.ke, +254771891571 (on the Kenyan tax dispute and the struggle for tax justice across Africa)

▪ Mr Nyikaw Ochalla, Anywaa Survival Organisation, London, ochalla@hotmail.com, +447939389796 (on Karuturi in Ethiopia and the indigenous peoples' situation)

▪ Mr S. Kannaiyan, South Indian Coordination Committee of Farmers Movements, India, sukannaiyan69@gmail.com (on Karuturi's operations in India and Africa seen from the perspective of Indian farmers)