Civil servants battle money lenders

financialBy Billy Ntaote

MASERU — A group of civil servants locked in a battle with money lenders are now fighting to prevent deductions made from their salaries through debit orders from their bank accounts since government suspended stop-order deductions.

Speaking to the Lesotho Times, the aggrieved borrowers represented by Wandile Sixishe, Patrick Tabani, ’Mapulane Thaisi, Seleoa Tsita, Mathabang Motjotji and Malikoli Ratalane argued following the October 2012 decision by the government to intervene and suspend stop-orders made at Treasury on all public servants salaries, money lenders resumed deducting on salaries through debit orders which they now claim they never authorised.

The group of more than 100 borrowers had in 2010 sued Afrisure Personal Financial Advisors (Pty) Ltd, B-Blue Financial Services and Select Management Services for charging exorbitant interest rates of up to 65 percent as opposed to the 25 percent interest rate stipulated by the law.

The Court of Appeal in October 2010 had ruled “it is clearly desirable that steps be taken as soon as possible to ascertain what amounts are legally due to or by the borrowers and that the National Treasury and the Accountant General be informed so that when deductions are made the necessary set offs are taken into account”.

The court had said the parties would be well advised to consider agreeing on the appointment of a suitably qualified person, such as an accountant, to make a study of the relevant pay slips and the loan agreements and to calculate what is legally owed by or to each borrower, and in the case of those borrowers who still owe amounts to the lenders, what deductions should be made each month.

In an unfortunate turn of events, the public servants and the money lenders have been engaged in a cat and mouse chase after former Accountant General, Kenneth Hlasa’s firm, GH Consulting (Pty) Ltd, was engaged in June 2011 to recalculate the loan amounts.

Since then, the group representing public servants borrowers has been aggrieved by Hlasa’s issuing certificates showing recalculations were made and the lenders have complied with the Court of Appeal judgment to the money lenders.

The group told the Lesotho Times this week the long running battle has now taken a new twist with the public servants salaries deducted from their bank accounts in spite of the court of Appeal ruling.

“Hlasa has not never given us a report of the recalculations that he was appointed to make.

“We have since learned that debit orders are being used to make the deductions following the government’s decision to have deductions on our salaries stopped,” they said.

The group said one of the banks agreed to have the debit orders stopped in March this year but for the past months the borrowers still had money deducted from their accounts.

“When we complained to our banks they told us that we had stop orders and we were promised they would stop repeatedly but they never stopped,” said one of the borrowers.

The group said upon realisation that the Court of Appeal orders continued to be violated they asked Acting Chief Justice Tšeliso Monaphathi’s to intervene.

That is when legal officers of the banks were informed about the Court of Appeal Judgment that has not been fulfilled.

Deputy Registrar of the High Court Mojela Shale said he was approached by a group of disgruntled public servants and all he did was ensure they met the Acting Chief Justice.

Shale said he is not aware of the finer details of how the grievances of the public servants were addressed by the Justice Monaphathi.

Approached for a comment the B Blue Financial services Country Manager Jacgues Van Rensburg said recalculations were made by individual companies and with the consultation of the borrowers representation Hlasa was appointed.

Van Rensburg said Hlasa gave his company a certificate that the recalculations were done according to the money lenders order of 1989 and court of appeal orders.

“He did show that in the recalculations 25 percent interest on the principal was charged per year,” he said.

Van Rensburg said it should be clear the court only advised for the recalculations to be made.

He said the borrowers are now complaining as they started deductions from bank accounts of the borrowers as they had signed for a debit order to be made in the agreements they entered into with the money lenders.

He said on October 25, following the government’s decision to suspend stop orders in a letter written to them by Ministry of Finance Principal Secretary Mosito Khethisa, the money lenders were advised to seek other alternative means of deductions hence their decision to resort to debit orders.

“We have actually paid out millions of Maloti to some borrowers after we found out that we had deducted more and we on the other hand should get paid what we are owed by those who had not yet settled their debts,” Van Rensburg said.

He said it has come to the realisation of the money lenders the borrowers now want to default on the loans they are supposed to settle.

For his part, advocate Kananelo Mosito  (KC) told the Lesotho Times it has come to his attention that some people who were not part of the case before the court have taken advantage of the results of the case and incessantly complain.

He however said the money lenders have been defeated in numerous court cases by the borrowers and he is surprised the matter still drags on with deductions being made from the public servants bank accounts.

“There was someone who was supposed to help them with the recalculations but until today I’ve not received the report of the recalculated loans,” Mosito said.

Mosito explained there continues to be public outcry among civil servants because Hlasa has refused to furnish borrowers with a report of the recalculations arguing he was has submitted his work to the moneylenders who paid for his work.

Mosito said the public servants have since been advised by his office as to what action should be taken but refused to disclose his advice to the borrowers.

Contacted for a comment the Standard Lesotho Bank Head of Marketing ‘Mamoabi Ralebitso told the Lesotho Times the bank cannot comment in detail on the issues, however she said their clients seemed to have signed a debit order agreement with the money lenders.

She said her bank is not involved in the agreement of the debit orders as they were entered into by the clients and the money lenders.

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