Mobius Motors Ltd, the company behind the production of Kenya’s pioneering branded car, has announced its closure of business operations through liquidation.
In a statement on August 5, the company announced that it was engaging in a voluntary liquidation process aimed at winding up its activities.
The company said that the decision was made at a meeting of Shareholders held by its management on August 5, 2024.
As part of the process, the company has appointed KVSK Sastry as the liquidator in charge of overseeing the winding up of the company.
“At a meeting of the Shareholders held on 5-Aug-2024, it was Resolved to place the Company under Liquidation as per Section 393(1) (b) of the Insolvency Act and to appoint KVSK Sastry as the Liquidator to wind-up the Company,” read the statement.
Creditors Meeting to Approve the Appointed Liquidator
A creditors’ meeting is scheduled for August 15, 2024, at 9 am at the Mobius Factory in Nairobi to approve the appointment of the liquidator as per the provisions of the Insolvency Act.
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“Notice is hereby given that a meeting of the creditors will be held on 15-Aug-2024 at 9AM at Mobius Factory (Sammer Africa, Mombasa/Enterprise Road Junction, Nairobi) to consider, and if thought fit, to pass a Resolution approving the Shareholders’ nominee as the Liquidator of the Company as per Section 408 of the Insolvency Act.”
Also, the company announced that the list of names of the creditors and proxy forms, will be available for inspection on August 9, 2024, at the company’s offices in Nairobi.
“List of names of the Creditors and Proxy forms will be made available, free of charge, for inspection on 9-Aug-2024 at the Company’s offices at Mobius Motors office, Block C3, Sameer Business Park, Mombasa Road, Nairobi.”
Mobius Motors’ Financial Woes
Mobius Motors, which launched Kenya’s locally produced car in 2015, has faced significant financial challenges in recent years.
In 2021, the company sought court protection from a Ksh 73 million tax demand by the Kenya Revenue Authority (KRA), which could have forced it to shut down its operations in Kenya.
Mobius Motors filed an application at the court arguing that the company would suffer significant financial loss if the tax regime was not suspended.
In a bid to prove its financial vulnerability, the company made available its audited financial reports before the court.
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The 2019 end of year report revealed that the company had a liability of Ksh 434.3 million and a shareholders’ deficit of Ksh 204.8 million.
It also detailed that by August 2020, this position had further deteriorated to a liability of Ksh 649.2 million and a shareholders’ deficit of Ksh 389.1 million.
Following a close review of the submitted documents, the High Court granted a stay of execution, allowing Mobius to provide a bank guarantee of Ksh 40 million.
“Looking at the audited reports produced, Mobius has made out a strong case that a payment of Sh73,235,647 from its resources would most probably have an adverse effect on its operations. That would be substantial loss,” said Justice Francis Tuiyott.
The closure of Mobius Motors Kenya Ltd marks the end of an era for the pioneering Kenyan automobile company, which aimed to provide affordable and durable vehicles designed for the challenges of African driving conditions.
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