Move leaves R7bn worth of litigation at risk
The Passenger Rail Agency of South Africa’s legal battles with some of its service providers, the Hawks and National Prosecuting Authority (NPA) over more than R7-billion worth of contracts deemed to have been tainted by corruption, are hanging by a thread.
This comes aer Prasa was placed under administration following the collapse of the entity’s interim board by Transport Minister Fikile Mbalula, and was issued with several letters by its lawyers, Werksmans Attorneys, indicating its decision to withdraw as the rail entity’s lawyers over nonpayment of its invoices.
“There are so many balls in the air and the new administrator is evidently overwhelmed. Multiple cases may collapse as a consequence,” said a source.
Werksmans Attorneys’ chairman David Hertz wrote two letters to the entity’s administrator, Bongisiwe Mpondo, communicating the law firm’s decision to pull out of all the major cases in which it is representing Prasa across the country.
In his letter, dated January 15 2020, Hertz revealed that Werksmans attorneys was owed R19-million by Prasa for all services rendered in numerous court matters which are before the high court and some before the supreme court of appeal.
In his desperation to get Mpondo to act, Hertz copied the Presidency, Minister of Finance Tito Mboweni and Mbalula in his communication.
He made it clear to Mpondo that as long as the invoices remained unpaid, his law firm had no intention of turning up in court to represent Prasa on all court maers on their books.
“Prasa’s failure to discharge our invoices for services rendered, on the express instruction of Prasa or in compliance with the statutory requirements of the PFMA [Public Finance Management Act], is unlawful.
It is all the more disheartening viewed in the context of the fact that Werksmans has continued to achieve tremendous success in Prasa’s fight against corruption aggregating to in excess of R4-billion thus far,” reads one of the letters.
In the same letter, Werksmans reminded the rail entity and Mpondo that despite nonpayment of their invoices, the law firm had succeeded in defeating the fake “doctor” Daniel Mthimkhulu’s application for leave to appeal with costs, in December 2019, and ensured that all affidavits and documents were filed on time on the Siyangena matter, which involves in excess of R6-billion.
The law firm said the rail entity was running the risk of failing to have representation on the matter, sat down by the deputy judge president for hearing from
February 24 to 27.
Hertz said their withdrawal would also leave Prasa at risk of paying R6-billion to the entities and persons it had identified as key players in the corruption frenzy involving Siyangena.
In the same letter, Werksmans also said that Prasa stands to lose R80-million in dividends if it fails to oppose an application by Swifambo and Auswell Mashaba to set aside the supplier’s liquidation, a process which was initiated by Prasa.
The law firm said that more than 100 legal matters with claims amounting to R1-billion are also at risk of collapse.
Prasa spokeswoman Nana Zenani said: “Prasa is aware of its duties and obligations regarding its suppliers. We have and continue to engage internally with the suppliers on payment matters as well as the challenges facing the organisation.”
By Aubrey Mothombeni
mothombenia@sundayworld.co.za
Werksmans ‘dumps’ Prasa over R19m unpaid bill
