Mobius shuts down after 13 years amid mounting debts, tax dispute
Business
By
Kelley Otieno
| Aug 06, 2024
Mobius Motors Ltd, a home-grown automaker has closed business after 13 years of operations.
Mobius was introduced as an affordable sports utility vehicle (SUV) designed to beat the terrain of African roads.
In a statement to newsrooms Tuesday morning, the company said shareholders agreed to place the company under liquidation.
"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," noted Mobius's Director Nicolas Guibert.
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Liquidation involves orderly winding up of the company's affairs, settling debts and distributing any remaining assets to shareholders.
"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," noted the firm.
The shutdown comes after years of mounting debts and a ="https://www.standardmedia.co.ke/business/article/2001393856/mobius-fears-insolvency-if-it-pays-kra-sh85m-tax-arrears">multi-million-shilling tax dispute< with the Kenya Revenue Authority.
Statistics from the Kenya Motors Industry Association also show a decrease in units sold in 2023: 11,370 units down from 13,352 in 2022. Mobius was founded in 2011 to build a vehicle in Africa for the continent.
It began with the first-generation Mobius 2 worth Sh1.5 million launched in 2015 and later rolled out Mobius 3 valued at Sh3.9 million.
While Mobius has had a decent number of investors, global automakers like Toyota and Volkswagen also boosted their investments in Kenya. However, they all face the same challenge: stiff competition from Japan's used cars import market.
In 2020, Mobius claimed it would collapse if it was forced to pay a ="https://www.standardmedia.co.ke/business/article/2001393856/mobius-fears-insolvency-if-it-pays-kra-sh85m-tax-arrears">Sh85 million tax< demand by KRA.
In 2018, according to court records, KRA is pursuing Mobius for withholding tax on software purchases, consultancy services, royalties and some expenses incurred by Mobius in the UK.
An audit report attached to the court record indicates that Mobius incurred a Sh425 million loss in 2018 while its liabilities exceeded its current assets by Sh434 million.
The firm made a Sh45,817 profit in 2018 and Sh295,196 in 2019.