Rea Vaya Board Dissolved Allegedly Because of Fraud, Business Rescuer Reveals It Owes SARS Millions
- The Rea Vaya operator, Piotrans, owes SARS over R60 million after it was placed under business administration
- The business practitioner revealed that the board was dissolved after irregular payments and maladministration were discovered
- South Africans woefully shook their heads at how Mzansi's state-owned companies were sinking
Tebogo Mokwena, Briefly News's current affairs journalist, offered coverage of current affairs relating to state-owned enterprises during his seven years at Daily Sun and Vutivi Business News.
Source: Getty Images
The Rea Vaya board followed the example of several state-owned companies' boards and was dissolved. The company operating Rea Vaya, Piotrans, has been placed under business administration, and this was because Rea Vaya was drowning in debt. South Africans were not surprised and pointed their fingers at the African National Congress.
Rea Vaya placed under administration
According to eNCA, the board was dissolved after creditors wanted to take a part of the fleet because of its debt. Mahier Tayob, the business rescue practitioner appointed to rescue Rea Vaya, revealed that there had been a lot of financial mismanagement and fraud. He believes that these issues brought the company into liquidity, leading to the court issuing the business rescue order.
How Rea Vaya got stuck in tax debt
Tayob pointed out financial misstatements and contracts that were not supposed to be signed. He added that he believes some irregular payments were made, and as a result, the company may have been involved in fraudulent activities. He is currently compiling a report revealing the extent of the fraudulent activities.
Tayob revealed that being taxi drivers and owners historically, Rea Vaya's shareholders would be the last to receive payment. Rea Vaya made an upfront payout, which left the company with an R64 million tax deficit. The creditors allegedly funded the company, and the shareholders pocketed the dividends.
Mzansi bemoans SOEs' conditions
South Africans on Facebook felt sour about the condition of state-owned enterprises.
Stan Mda said:
“WE are still in denial. The sooner we wake up, the better.”
Bruno Valterio wrote:
“They are all going into business rescue. Everything is going down the drain. It is what it is.”
Mike Lans remarked:
“If it’s part of the ANC, then it’s not new news.”
Mahlatse-wa Raolane pointed out:
“Nothing under the ruling party is going well. Even its national office and branches.”
Joey Mokoena asked:
“Are all getting business rescue?”
South African Post Office needs almost R4 billion for business rescue
In related news, Briefly News reported that The South African Post Office needs R3.8 billion for a financial bailout.
Business rescuers have been appointed to dig SAPO out of the financial dirt it has found itself in after it was revealed that it had not made any profit in more than 15 years. South Africans rejected their bid and criticised the African National Congress, accusing the party of destroying whatever it touched.
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Source: Briefly News
