LNDC seeks Loti Brick liquidation

The Lesotho National Development Corporation (LNDC) has filed a motion in the High Court seeking an order to liquidate the debt-ridden Loti Brick (Pty) Ltd.

The brick manufacturing company faces tax liabilities exceeding M31 million and a certified statement of debt in the amounting of M7.4million owed to the Revenue Services Lesotho (RSL). The sum comprises unpaid Corporate Income Tax, Fringe Benefit Tax and Pay As You Earn (PAYE). 

Established in 1978, Loti Brick is controlled by the LNDC with its operations involving the manufacturing, sales, and distribution of clay brick products. 

In its notice dated October 8, 2025, signed by interim CEO Molise Ramaili, LNDC said that Loti Brick (Pty) LTD, which ceased operations on September, 17 2024, is unable to pay its mounting debts.

The LNDC wants the matter to be heard urgently in the High Court of Lesotho Commercial Division on October 20, 2025.

LNDC says it holds a liquidated claim in excess of M20 million and is the major shareholder of Loti Brick (Pty) LTD. It further notes that the company has been experiencing financial distress since 2022 as a result of a sustained cash flow crisis compounded by industrial action.

A cursory examination of the respondent’s (Loti Brick) most recent audited financial statements for the year ended March 31, 2023 confirm that the company incurred operating losses in both the 2022 and 2023 financial years to the amounts of M7,883,385.00 and M11,169,745.00 respectively.

Loti Brick Pty Ltd admits that it has accumulated substantial tax liabilities. It announced a temporary closure in September last year, citing financial difficulties that had crippled its operations for years. The company has since remained closed. 

Two months later, the Public Accounts Committee opposed a move to sell the state-owned company to Lephema Executive Transport.  

LNDC argues that based on Loti Brick’s financial woes, it has legal grounds to preserve its estate pending final determination of the liquidation proceedings.

The Corporation wants Loti Brick Pty Ltd to be placed under provisional liquidation in the hands of the Registrar of Companies in terms of section 8 (1)(a) and (b) in conjunction with section 11 of the Insolvency Act, 2022.

It also prays that a rule nisi be issued wherein the Respondent and interested parties are called upon to show cause, if any, on November 24, 2025 why a final order of liquidation should not granted.

Showing the nature of application, LNDC prays for the provisional liquidation of Loti Brick Pty Ltd and for an interim interdict staying the sale in execution scheduled for October 31 2025.

“The Honourable Court has jurisdiction to entertain and determine this application in terms of Section 8 (1) of the Insolvency Act, 2022 and Section 125 of the Companies Act 2011, which respectively empower the Court to grant a provisional liquidation order upon application by a creditor or shareholder where the debtor is unable to pay its debts or has ceased to carry on business.

“The respondent is a company incorporated and domiciled in Lesotho, with its principal place of business situated within the jurisdiction of this court. The cause of action arose within this jurisdiction, and the relief sought pertains to the liquidation of a Lesotho-registered company and the stay of execution of a writ issued by the Magistrate’s Court for the district of Maseru,” LNDC says.

Furthermore, the Commercial Division of the High Court is the appropriate forum for adjudicating matters involving corporate insolvency, creditor protection, and urgent commercial relief, it adds.

Loti Brick (Pty) Ltd’s movable property is scheduled to go under the hammer on October 31, 2025 after RSL obtained a judgement in the Maseru Magistrate Court on August 19, 2025.

The order instructs the Sheriff of the court to attach the property in a bid to recover M7,401 813.00 owed by the company.

The said amount attracts additional tax at the rate of 22 percent annually from the date the tax fell due until the outstanding amount has been settled.

No amount has been paid since judgement was obtained.

“This is therefore to authorise you to attach, remove and take into your custody or possession the movable goods of Loti Brick (Pty) Ltd and if insufficient attach the immovable property and of the same cause to be realised by public auction in sum of M7,4 million.

“This together with your costs of this execution and pay to the RSL the aforesaid sum of M7,4 million and return to this court what you have done by virtue hereof,” said clerk of the court in a letter to the Sheriff.

According to the order, if Loti Brick (Pty) Ltd pays the amount specified in the margin hereof with the Sheriff’s charges within half an hour of the entry of the Sheriff, the company will not be required to pay any further costs of execution.

The amount of any payment made by Loti Brick (Pty) Ltd and the date therefore shall forthwith be endorsed on the original and copy hereof, which endorsement shall be signed by the Sheriff and countersigned by the execution debtor or his representative.

This execution may be paid out before sale, subject to the payment of the Sheriff’s fees and charges of execution, which may be required to be taxed, the court ruled.

Some of the movable property to be auctioned include; three fork lifts worth M110.000.00 each, an M90.000.00 Isuzu 4×2 vehicle (Number A478 BDJ), frost loader (M270.000.00), and a dump truck (A906 BBJ) worth M250.000.

Loti Brick (Pty) Ltd’s immovable property situated at Mankoaneng Ha Teko Mazenod Maseru, known as plot No.12314-350, as shown on Plan No.12314 held by the Chief Surveyor and held under Lease No.12314-350, will also be auctioned.

The LNDC is the Government of Lesotho’s main parastatal agency mandated to implement the country’s industrial and commercial development policies. The Corporation was established by an Act of Parliament, the LNDC Act No.20 of 1967 as amended, and mandate of the Corporation as stipulated in section 4(1) states that:

The purpose of the Corporation is to initiate, promote and facilitate the development of manufacturing and processing industries, mining and commerce in a manner calculated to raise the level of income and employment in Lesotho.