Transport MMC welcomes business rescue for Rea Vaya bus service

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Transport MMC in the City of Johannesburg, Kenny Kunene has welcomed the placement of Pio-Trans, a company which operates the Rea Vaya bus service, under business rescue.

The Gauteng High Court in Johannesburg placed Pio-Trans, under business rescue.

Rea Vaya commuters have been urged to remain calm as the buses will operate as usual.

Kunene says the company is plagued by fraud, maladministration and mismanagement.

“Some people there were being paid three times the market rate of the job that they’re doing. Some people have been employed without qualifications. Some people were earning double salaries, some were employed in positions that were unnecessary. So, the money that was supposed to be going to their  shareholders was paying people for doing literally nothing, was paying people for just coming there to add numbers.”

Rea Vaya I ‘From the beginning, the Pio-Trans deal set shareholders up for failure’: Kenny Kunene

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The City of Johannesburg began its Rea Vaya transport infrastructure project over 14 years ago when it partnered with local taxi drivers to create a bus operating company.

In the court papers, one of the creditors, fuel supply company Rockville Investments, noted that the Pio-Trans’ BEE model is worthy of being saved in the greater public interest.

The business rescue practitioner, Mahier Tayob says immediate steps are being taken to turn around the company’s finances.

“But the court then ruled that this company is a candidate for business rescue. And the extent of what you’re looking for will only be made available after what we call a Section 141 investigation. My appointment is only sanctioned after the court order and approval by the CIPC. I will then commence the investigation, and that report will be contained in the business rescue plan. It’ll be a detailed report giving a timeline of the scenario and the events that led to this company going into business rescue. Whether it was fraud, whether it was maladministration, non-disclosure of material facts.”

Other litigation and judgments against Pio-Trans include a ruling ordering the company to pay over R6.8 million to a bus operating company namely Litsamaiso Limited and a SA Revenue Service litigation of nearly R800 000.