More than 90 lawyers, advocates and debt collectors are owed more than R500-million for debt recovery work they did for the City of Joburg Metro amidst allegations that some officials are getting kickbacks paid in cash from debtors.
The disgruntled attorneys and debt collectors claim the city appointed them to be part of panellists roped in to assist the metro to claw back millions of rands owed to it.
The service providers received letters from the city’s acting group head of Revenue Shared Services Centre, Malope Ramagaga on February 14, stating that the city was recalling debt accounts that were previously handed over to the A910 Specialised Revenue Collection Panel.
A910 Specialised Revenue Collection Panel is the contract that was awarded to the specialised debt collection attorneys and debt collectors to assist the metro with the revenue collection for a period of 36 months.
The service providers were appointed after a tender was advertised on 18 February 2022.
Sunday World established that Ramagaga sent a memorandum to specialised debt collection attorneys and debt collectors in May 2024, telling the service providers that the debt collection accounts were being recalled and handed to the A910 Specialised Revenue Collection Panel.
At the time, in May 2024, Ramagaga said in his memo that the metro was undertaking an account alignment process.
“Effective 14 March 2025, all accounts handed over to the A910 Specialised Revenue Collection Panel from February 2023 to date will be recalled as part of this process. The reallocation of accounts will only take place once the consolidation process has been completed. In light of the above, you are required to submit all reports, working papers, models, analyses, and any other work conducted in the rendering of your services to the City of Johannesburg, in accordance with Clause 7.3.2 of the service level agreement signed on January 12, 2023,” said Ramagaga in
his letter.
Sunday World was reliably told that there were allegations of corruption emanating from recalling accounts, despite debtors being indebted to the city.
“Debtors who owe huge amounts of money to the city cut a deal with administrators, and at that point, the cash collected from those owing the metro is kept by corrupt officials, and doesn’t reach the city’s bank account. If these lawyers and debt collectors manage to collect R500-million for the city from debtors, why would those accounts be recalled? The city is losing a lot of money that is no longer collected by debt collectors due to rogue elements working in cahoots with debtors. If this can be investigated, so many people will be arrested,” said an insider.
Collectively, debt collectors told Sunday World that as part of 93 panellists appointed for debt collection, they have not been paid since August last year.
“This month marks seven months without being paid. Small businesses are on the verge of collapse from incurring monthly costs with no promise to pay for the work done,” said one debt collector.
“There are matters pending before court and we have pending negotiations and agreements with debtors on when they will settle accounts. We put in all the work at our own cost and the city shuts down the contract without paying the invoices and we do not only lose the commission, but we are also left with costs incurred in litigating, including counsel fees.”
City of Joburg’s spokesperson Kgamanyane Maphologela told Sunday World the metro is reviewing all outstanding claims.
“Any verified claims will be processed in accordance with contractual obligations. The city is working to resolve any payment delays as efficiently as possible,” said Maphologela.
He also rubbished claims of corruption. “The city takes any allegation of financial misconduct or corruption seriously. However, we are not aware of any instances where officials have collected money directly from debtors. The city has not received any formal complaint regarding such activities,” he said.
