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agricultural investment project or see its permit withdrawn.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)
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