Karuturi Agro Products PLC, a subsidiary of Karuturi Global Ltd, founder claims bank has “suspended foreclosure proceedings.”
By Birhanu Fekade |
Unable to repay loans borrowed from the Commercial Bank of Ethiopia (CBE) Karuturi Agro Products PLC, a subsidiary of Karuturi Global Ltd, is once again on the verge of foreclosure to recover the 55 million birr loan the bank has extended to the company.
According to the foreclosure notice CBE issued on November 17, bidders are invited to take part until the offer expires on December 22. The Indian firm has borrowed the sum providing property collaterals of 100 thousand hectare farmland.
Out of the total farmland only 7,645 hectares was cultivated, the notice reads. In addition to that, warehouse, quarters of workers and prefabricated house are included in the property the bank issued for sale.
The information The Reporter obtained from CBE reveals that the bank also has sold two water drilling equipment which belonged to Karuturi. According to Ephrem Mekuria, head of corporate communications at the bank, the two machineries, which were worth some 2.6 million, were included in the loan recovery process.
The farmland has 50 years of lease period which the Ethiopian government allotted to Karuturi some six years ago with ineffably cheap prices.
Founder and managing director of the company, Sai Rammakrishna Karuturi, in an email response sent late Friday afternoon to The Reporter, claimed that the foreclosure proceedings initiated by CBE “in a vindictive and petty manner in violation of all rules and laws of this land” has been suspended.
The Reporter was unable to confirm the suspension via proper documentation until press time (Friday 8:30 PM).
Ephrem on his part said that he is not aware of any suspension of the foreclosure until the end of Friday office hours. However, he also indicated that the company has a window of opportunity to settle at least 25 percent of its debt obligations before Tuesday.
It is for the second time that CBE issued foreclosure notice against Karuturi. It is to be recalled that in October last year; The Reporter published a news article about Karuturi nearly escaping foreclosure settling 25 percent down-payments for the 65 million birr (some four million dollars) credit.
Karuturi has been in court trials for similar credit cases with Zemen Bank. The loans extended to the firm were not paid on the due date. The privately owned bank, Zemen, took the case to court until the dispute was settled via negotiations between the two sides. Karuturi admitted that it still owes Zemen some 26 million birr.
However, Karuturi sternly criticized the way banks and officials have acted towards his endeavors here. In an interview with The Reporter earlier in the week, the big man who considers himself as the first person to introduce commercial farming in Ethiopia, was bursting out with frustrations. The managing director threw allegations and severe criticisms against individuals and institutions. He also revealed that he was unwillingly provided 300 thousand hectares land by the Gambella Regional State to cultivate. According to Karuturi, his capacity was to cultivate 10 thousand hectares in the region.
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