Mobius Motor Company Drowns in Debt, Forced to Shut Down
Key takeaways
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- Kenyan vehicle assembly company Mobius Motors Limited has announced that it is winding down operations after 13 years of existence.
- In a tragic press release sent out on Tuesday, its director Nicolas Guibert declared voluntary liquidation of the company.
- The decision was taken by the company’s shareholders following massive debts and tax disputes with the Kenya Revenue Authority (KRA).
- Mobius was established in 2011 to bring vehicle manufacturing closer to the African Market.
- One of the company’s biggest successes is the Mobius II Sub-Utility Vehicle (SUV), which is among the most popular car models in Kenya.
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Mobius’s grueling battles with debt and KRA
Behind the glamorous car showrooms, the Sameer Business Park-based company was battling financial problems that threatened its existence.
Mobius Motor Company’s financial woes came off the back of admirable success. By 2017, the vehicle manufacturer had sold all 50 cars of its Mobius II model.
Its compelling potential was boosted when Mobius was invited to supply vehicles to the former Jubilee administration.
Amid the promising business environment, Mobius closed in on scaling its production, targeting to produce the cheapest cars in the African market.
Unfortunately, the success did not last long as in 2021 the taxman came along with tax claims against the motor company amounting to 73 million shillings.
The company that supplied Kenya, Tanzania, and Uganda with new transportation cars at the time came under serious threat.
Mobius swiftly moved to court seeking protection against the Kenya Revenue Authority. In its ruling, the High Court of Kenya blocked KRA from demanding the tax because Mobius was in a financial crisis.
The court’s decision, however, was a short-lived relief for the company.
Its financial status continued further downward with mounting debt and an ever-lurking tax dispute with KRA.
Also read: List of Nissan Dealers in Kenya And Their Locations
Mobius Motors taps out, announces voluntary liquidation
The August 5 2024 shareholders meeting proved to be the last straw that broke the camel’s back.
Liquidation is the process of terminating a business and distributing its assets to creditors. It takes place when a company is insolvent and unable to meet its debt obligations.
“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,” said Director Nicolas Guibert in a press release.
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