Flying King liquidated

Flying King liquidated

MASERU-FLYING King, the troubled second-hand vehicle agent, is being liquidated and its customers might never get their vehicles.
Court documents seen by thepost reveal that the company is heavily indebted to a shareholder, customers and the Lesotho Revenue Authority (LRA).

Fingers have been pointed at Joel Mohale, the director, who is accused of “recklessly spending money for personal gain and setting up other businesses”.
Mohale is also accused of spending money on dinners with politicians and holidays while the company failed to deliver cars to clients, pay taxes and service its loans.

At the same time, relations between the shareholders have also soured amid scurrilous counter accusations.
Flying King’s troubles appear to have started in 2018 when it failed to pay for the clearance and transportation of clients’ vehicles from Durban to Lesotho.
Flying King owed South Africa’s African Vehicle Clearance Specialist (Avecs) M400 000 for the clearance and transportation of vehicles clients bought from BE Forward in Japan.

Mohale is accused of allowing that debt to accumulate while spending clients’ money on personal projects and financing his lifestyle instead of paying Avecs.
Sometime in mid-2018 Avecs loaned Flying King M400 000 so it could deliver clients’ vehicles. At the same time Kuben Pillay, Avecs’ director, also bought 51 percent of Flying King in a deal that was supposed to salvage the company.

Court documents however show that Mohale remained the Flying King’s managing director and was in charge of its finances.
The loan doesn’t seem to have helped Flying King for long because it continued to struggle to pay Avecs.
In court papers filed earlier this year Pillay says Mohale continued using the clients’ money instead of paying Avecs.

Pillay said Flying King’s debt to Avecs increased to a staggering M1.7 million and Mohale was not cooperative when he asked to meet him.
The allegations are contained in Pillay’s urgent High Court application to put Flying King under judicial management.
He told the court that the company had potential but Mohale was destroying it with his reckless expenditure and mismanagement.

Pillay said he worried that if the trend continued the company might end up owing hundreds of clients and millions to the revenue authority.
Advocate Neil Fraser, who was appointed judicial manager, is however said to have failed to get Flying King’s financial records from Mohale.
Frustrated, Advocate Fraser applied for a liquidation order which was granted. He is now planning a meeting with the company’s creditors in January.

The liquidation could provide little solace for clients who have spent months waiting for Flying King to deliver their vehicles. With Flying King almost insolvent, it is highly unlikely that the customers will recover much of what they gave the company.
In the meantime, the fight between Pillay and Mohale has escalated. Pillay accuses Mohale of opening another company to compete with Flying King.

He says Mohale used Flying King’s money to start HMR Transport & Logistics with Donald Monethi.
thepost has seen an invoice that Mohale issued to a client under Flying King’s name but with HMR’s banking details.
Pillay says Mohale did this while he was Flying King’s managing director.
An auditor who analysed Flying King’s finances at Pillay’s behest found that M4 million could not be accounted for.

The audit also identified incidences of “misappropriation of company assets” and use of company money to buy personal vehicles. Taxes had not been paid and financial records were not kept, the auditor noted.
The audit shows that Flying King was a thriving company being hamstrung by fraud and mismanagement.

In 2018, for instance, the company had M26 million in turnover which increased to nearly M30 million the following year. Yet it was not paying its loans, taxes and suppliers.
A few months before applying for judicial management Avecs wrote to Mohale demanding M1.4 million it said he owed.
That letter, attached to the court documents, also accused Mohale of fraud, forgery and corruption.

“We have learnt of the acts of serious misconduct in that you inter alia allegedly falsified payment transfers and refunds to clients and cashed cheques without explanation or supporting documents,” Avecs said.
thepost has seen emails from customers complaining that they had not received their vehicles despite paying Flying King.
Last week Pillay said Mohale was using political connections to avoid taking responsibility for his actions.

A press release from his lawyers said the same after the Ministry of Trade banned Be Forward from exporting vehicles to Lesotho. The ban means Avecs also cannot deliver cars to Lesotho until the fight with Mohale is resolved.
In the press statement Pillay’s lawyers alleged that Mohale was behind the ministry’s decision.

They accused Mohale of using “his influence within the government quarters to convince officials to issue letters without justification in order to escape liability for his misdeeds when running the company and avoid answering questions”.
The statement also said Mohale used Flying King’s money to fund construction companies, car hire, tyre changing shop and various other companies with Monethi.

“It became glaringly clear that these business ventures were irregularly if not illegally financed with funds which belonged to customers and Avecs.”
Mohale has denied the allegations, insisting the Flying King is a viable company that is only being liquidated because of squabbles between him and Pillay.
“These allegations that I looted the company, misused funds for my personal entertainment and others come from my partner who is hell bent to see me falling,” Mohale said.

“His aim is to destroy my life and nothing else.”
Mohale said when he started Flying King, he was ordering vehicles from Japan and using Avecs for logistics.
He admitted that Flying King owed M400 000 to Avecs.
“We agreed that we would pay him in instalments for a period of a year and we were paying but after he joined us (as a shareholder) he advised us to use the money to renovate the office and do other things for the company,” he said.

“We were only shocked when he later came and said we owed him M800 000 but we did not refuse to pay it even though we did not understand how he came to that figure.”
Mohale said because he was now suspicious of Pillay’s motives, he started HMR through which his customers paid and he ordered vehicles using Flying King.

He said Pillay became aware of this and he withheld cars instead of delivering them to Lesotho despite that the customers had paid.
Mohale said he started HMR because Pillay himself had registered Be Forward Lesotho behind his back.
He said when the people demanded their cars or money back Mohale approached the ministry seeking its intervention.

Asked if he used the company’s funds without Pillay’s knowledge, he said “every transaction was made with Pillay’s blessings in that we could not use any funds without his signature”.
He however said “there is M20 000 which I used and purposely refused to pay back”.

“I had realised that I was working for Pillay in my company while he was busy registering another company in my back competing with me and yet he is my partner”.
“It’s conflict of interest,” he said.

Mohale said Pillay was touting Flying King’s employees to turn against him and join him in his companies “and out of anger I told him that I was resigning, leaving the company”. He however said he didn’t officially resign because “workers pleaded with me saying I should not leave because they were afraid to work with this Indian”.

Staff Reporter

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