Twiga argues that the court case filed by Incentro was done in bad faith. However, it looks forward to settling the matter in a timely manner.
Twiga has confirmed to TechCabal that it is in talks with Incentro Africa, a Google services reseller, to resolve their ongoing legal tussle. Twiga was taken to court by Incentro to recover a $261,878 debt. Incentro Africa asked the court to give a liquidation notice to Twiga if the debt remained unpaid.
In this case, Incentro is owed money, and its request for liquidation from Twiga implies that Incentro has lost confidence in Twiga’s ability to repay and wants faster resolution. It may also be a strategic move to pressure Twiga into settling the debt and position Incentro as the first to receive payment from selling Twiga’s assets in case of liquidation.
Twiga appealed the notice, arguing that Incentro’s court filing was in bad faith. The startup also confirmed that it is in talks with Google Ireland over the cloud service bill. While Twiga is disputing the amount it was billed, the company insists it’s in great financial health. Despite recent layoffs and overall business overhaul, it also disputed the amount and declared its financial health.
Twiga objected to the liquidation demand, citing that it was made in bad faith. It is currently engaged in discussions with Google Ireland Limited, the primary provider of Google Cloud Services. “The Company (Twiga) disputes owing the amount of USD 261,878.75 as set out in the Statutory Demand the statutory demand, (which) is made in bad faith and with ulterior motives and in particular and attempt to compel the Company settle a disputed debt and the Company is solvent and still operational,” a court document seen by TechCabal stated.
Twiga’s legal head, Daniel Ngugi said that any liquidation proceedings would harm the company’s reputation and trigger cross-default clauses with its lenders. “In the event Incentro Africa Limited is permitted to file and publish a liquidation petition, it will cause extreme damage and prejudice to the Company as a wrongful impression will be created to its employees, business partners, bankers, funding partners, creditors, the Kenya Revenue Authority, etc,” the countersuit argued.
Per a person close to the matter, Twiga may have been battling cashflow issues. “It points to a cash flow problem,” a source told TechCabal. Cash flow problems in agro-tech firms like Twiga stem from the seasonal nature of business, which leads to uneven revenue streams and challenges in meeting vendor payment schedules.
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