Read in magazine

What began as ‘Checkpoint’ responding to the plight of Soweto residents, dependent on Rea Vaya buses to get to and from school and work, led to a discovery of theft on a grand scale at service provider Piotrans

Piotrans is one of two companies awarded the bus rapid transit or BRT tender on the eve of Africa’s first ever football World Cup in 2010. The BRT model had dual objectives: to provide safe and reliable transportation during the football spectacular, that would benefit Johannesburg residents long-term and reduce the number of unsafe taxis on our roads by getting taxi owners to switch gears and become business owners in the bus industry. All Piotrans shareholders are former taxi owners.

All went swimmingly well for about a decade. In November last year, Protea Glen resident and Rea Vaya user, Sipho Nhlapo, gave ‘Checkpoint’ insight into the impact mismanagement at Piotrans was having on commuters. “At most we have three buses a day, for the entire area. If there are three buses, then we know it’s our happy day because at least half of us will get to work,” Nhlapo told ‘Checkpoint’.

A bus driver, who wanted to remain anonymous fearing reprisal, added more clarity: “We are short of buses because majority have broken down and are not being fixed. Some have no parts at all. At the moment only 27 buses are operating and sometimes there can be as few as 10 or 15 on the road.” This is out of a fleet of 143.

Johannesburg Transport MMC Kenny Kunene told ‘Checkpoint’ that mass looting was at the heart of Piotrans’ problems. “The system was so corrupt and rotten, CEOs, financial managers, officials, and administrators that came in there, plus some of the board members that came in there, they were just stealing. They came in to take and leave.”

Following the ‘Checkpoint’ broadcast late last year, a flurry of activity ensued, leading to the eventual appointment of Mahier Tayob as Business Rescue Practitioner (BRP). Tayob is a liquidator and investigative auditor with a long list of international qualifications and accreditations. Since his appointment as BRP, Tayob has been going through Piotrans’ books with a fine tooth comb. He told ‘Checkpoint’, when he arrived in December, 10 of the 143 fleet were on the road. “All that was left was a carcass and that too was being preyed upon by vultures. There was nothing to salvage, metaphorically speaking, honestly, there was no meat on the bone. So I started the process with low hanging fruit first, take the buses that we can salvage and take parts from other buses that were cannibalised and try to increase the fleet.” Bus parts had been stolen and sold, ‘Checkpoint’ had previously been told. “Complete neglect, recklessness, fraud, theft, white and blue collar crimes,” Tayob added. “Already on the low hanging fruit we took the number of buses up to 50.”

In January, he was hoping to reach 90 buses through this process of repair. “Others are so badly cannibalised which is going to cost me a substantial amount of money to fix, they are going to be sold for scrap.” In its prime, Piotrans was able to generate R8 million a week. Tayob found the company on its knees. “When we took over, Piotrans was on R600 000. We are currently on R3 million. Through introducing more buses, internal control systems, stop the bleeding, stop the haemorrhaging. Since December, for the very first time we have a positive cash balance.” Tayob says his investigation has thus far unearthed some 23 forms of fraud, including misappropriation of assets, ghost employees, theft of inventory, aiding vendors to inflate prices, financial statement fraud, violations of the Companies Act, violations of the Income Tax Act, nepotism, conflicts of interest, and secret profits. He says this all happened in an atmosphere of impunity. “So the executive would have the assistance of different departments financial and so on, in operations you’d have the procurement guy working with the installation person, so it’s not one syndicate but many syndicates or many cabals within the organisation.”

Late last year, ‘Checkpoint’ interviewed former Piotrans board Chairperson Nomazotsho Memani, an advocate by profession, who pleaded ignorance of the widespread theft and fraud. She did, however, tell us that during her last days at the company she uncovered “an amount of R400 million was used for a period of 15 months to pay 267 service providers that were appointed. For example, a service provider that was paid a hundred thousand every month on retainer.” When ‘Checkpoint’ asked what this service provider was being paid for, she was not sure. “I think building the image of the organisation.” ‘Checkpoint’ put it to her that as board chair she should have known.

“I watched that interview and called the former board chair to ask her about the R400 million she mentioned on national television without qualification,” Tayob told ‘Checkpoint’. He also says he demanded a report on the investigation. “And what steps she’d taken to report this because in terms of section 34 of the prevention and combatting of corrupt activities there is a legal obligation to report this. She’s been very evasive very illusive.” Tayob says she stopped taking his calls when he demanded answers from her. When ‘Checkpoint’ followed up with Advocate Memani, following its conversation with Tayob, we too were ignored. “Of course this is one of the matters that is soon going to be under judicial deliberation. I will bring her to court to answer the very questions she could have done outside the court process,” he added.

Tayob has handed his findings to a law firm to assist with formulating the charges. He says numerous people involved with Piotrans have a case to answer. He says in any given financial year, board members were coming in and going out of a revolving door. “We are now busy with the timeline as to which members were there during that particular time where these occurrences of fraud took place because then they become liable. A director has a responsibility and cannot plead ignorance. They ought to have known. An act of commission which is a commission of fraud is equal to an act of omission. This will also allow me to claim damages from them for whatever prejudice Piotrans suffered.” He says he’s determined to recover every single cent and calls on the country’s law enforcement agencies to set a clear example. “If they fail to do so, I will pursue private prosecution because we’ve become tolerant of white-collar crime in South Africa. The public should demand accountability and responsibility. These prosecuting agencies must do their job. If justice is seen to be done this would be a deterrent for future would be fraudsters.”

Nkepile Mabuse is the presenter and producer of ‘Checkpoint’. It airs on eNCA every Tuesday night at 22h00. Harri Vithi and Tshegofatso Magolego are also producers on the show.

By Editor