Keroche's Woes: Ex-MD Sam Shollei Files for Brewer's Liquidation Over KSh 75m Debt

• Former Keroche Breweries managing director Sam Shollei was awarded KSh 45 million by the court in September 2022 for wrongful termination
• Shollei noted the amount had since increased to KSh 75 million due to interest and litigation expenses after the brewer failed to settle the debt
• The petition is based on section 425(1)(b) of the Insolvency Act, 2015, which states that a creditor may petition the court for a company's liquidation

Japhet Ruto, a journalist at TUKO.co.ke, brings over eight years of expertise in finance, business, and technology journalism in Kenya and globally.

Keroche Breweries' financial problems have worsened after Sam Shollei, the company's former managing director, asked the court to compel the company's liquidation over a KSh 75 million debt.

How much was Sam Shollei awarded?

The unpaid debt includes a KSh 45.5 million payout awarded to Shollei in September 2022 by the Employment and Labour Relations Court.

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Citizen TV reported that the court awarded the amount as compensation for the wrongful termination of his employment.

According to Business Daily, the amount increased to KSh 75 million due to interest and litigation expenses.

"At the time of filing this petition, Keroche is indebted to Shollei to the tune of over KSh 75 million, being the decretal amount, the costs of the suit and accrued interest at court rates,” Shollei's lawyer, Daniel Achach, revealed.

Why is Keroche facing a financial crisis?

The Naivasha-based brewer, owned by Nakuru senator Tabitha Karanja and her husband, Joseph Karanja, has faced multiple financial disputes over debt settlement in the past two years.

Hamilton, Harrison, and Mathews Advocates filed a liquidation petition in court regarding a KSh 233.7 million debt incurred from legal expenses.

Nakuru county also demanded KSh 9 million from the business in arrears for liquor licenses and ads.

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Why did Shollei file for Keroche's liquidation?

According to Shollei's insolvency case filed in the High Court, the company has not paid the debt in spite of numerous demands and discussions.

Shollei's lawyer noted that the company's inability to fulfil a commitment to pay off the debt and the Naivasha police's unwillingness to help auctioneers carry out the court's order were the catalysts for the liquidation petition.

The former MD engaged Okuku Agencies Auctioneers to collect the debt, but in February 2024, the senator contacted them to ask that they agree on a payment plan.

"On February 20, 2024, both parties signed a memorandum of understanding to that effect, but it was not upheld. The Employment and Labour Relations court ordered the officer in charge of the Naivasha Police station to help the auctioneer carry out the order on February 28, 2024," Achach disclosed.

The petition is based on section 425(1)(b) of the Insolvency Act, 2015, which states that a creditor may petition the court for a company's liquidation.

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Why did KRA take Keroche to court?

In other news, the Kenya Revenue Authority (KRA) accused Keroche of violating its agreement to stagger tax arrears of KSh 22.79 billion.

Due to its failure to fulfil its tax obligations, Keroche was shut down.

The High Court, however, ordered KRA to reopen the Naivasha factory pending the ongoing case between the two parties.

Proofreading by Asher Omondi, copy editor at TUKO.co.ke.

Source: TUKO.co.ke