Financial troubles facing Keroche Breweries are on the rise after its former managing director Sam Shollei petitioned the court to order liquidation of the company over failure to pay him a debt of Sh75 million.
The outstanding debt includes a payout of Sh45.5 million awarded to Mr Shollei in September 2022 by the Employment and Labour Relations Court in the form of compensation for wrongful and unfair termination of his employment.
The amount has increased to Sh75 million due to interest and costs of the case, according to Mr Shollei's court papers.
In the past two years the Naivasha-based liquor maker, which is owned by Nakuru Senator Tabitha Karanja, has been facing multiple financial-related disputes involving debt settlement.
These include a liquidation petition filed in court by Hamilton, Harrison and Mathews Advocates over a Sh233.7 million debt accrued from legal fees.
The company also faced a Sh9 million demand from Nakuru County in form of arrears for advertisements and liquor licences. The insolvency petition lodged by Mr Shollei at the High Court claims that the firm has failed to satisfy the judgment debt despite repeated demands and negotiations.
His lawyer, Mr Daniel Achach, says the liquidation petition was triggered by failure of the company to honour a promise to settle the debt and reluctance by police in Naivasha to assist auctioneers execute the court’s decree.
Mr Shollei had hired Okuku Agencies Auctioneers to recover the debt but Ms Karanja reached out in February 2024 requesting that they enter into an agreement on how the amount would be paid.
“Both parties signed a memorandum of understanding to that effect dated February 20, 2024 but the same was not honoured. On February 28, 2024 the Employment and Labour Relations court issued an order compelling the officer commanding Naivasha Police station to assist the auctioneer in executing the decree,” says the lawyer.
Police failed to assist the auctioneers. Having made several attempts for over two years, lawyer Achach says the auctioneers returned the warrants of attachment unexecuted.
“The petitioner has failed to secure assistance from the police despite the court orders, who have indicated their reluctance based on the political position held by the CEO of Keroche Breweries Limited. At the time of filing this petition, Keroche is indebted to Mr Shollei to the tune of over Sh75 million being the decretal amount, the costs of the suit and accrued interest at court rates,” he says.
The petition is premised on section 425(1)(b) of the Insolvency Act,2015, which provides that an application to the court for the liquidation of a company may be made by a creditor. Lawyer Achach says his client by virtue of the unsatisfied decree remains a creditor to Keroche Breweries and hence competent to file the winding-up suit.
“The execution of the decree in this case has been returned unsatisfied in whole, hence establishing a legal ground for the liquidation of Keroche Breweries,” says Mr Achach. He wants the company declared insolvent, be liquidated and for the court to appoint an official receiver as the liquidator.
