$6m debt: City hands businesses to debt collectors

​ NKULUMANI MLAMBO MASVINGO - Masvingo City Council has handed over tens of city business people to debt collectors in a bid to recove...




NKULUMANI MLAMBO

MASVINGO - Masvingo City Council has handed over tens of city business people to debt collectors in a bid to recover $6m that has not been paid in rates since 2013.
Council lawyers gave stern warning that they will attach properties if the business people fail to pay the debts in full.
Angry business people told The Mirror that the local authority was being insensitive at a time when the economy is on the precipice.
There were panic meetings throughout the city on Monday and Tuesday as the affected business people tried to negotiate with council to settle bills that range from as little as US$1 000 to US$40 000.
The business people have shops in the high density suburbs, buildings in the industrial areas and the CBD.
The Mirror has identified two law firms; Tsara and Associates and Saratoga and Makausi Law Chambers that have been engaged by council as the debt collectors.
In a letter written to the business people on June 1, 2017, Tsara gives the ratepayers until June 9 2017 to pay the full amount owed to council. The letter further says failure to pay the amount will result in legal action without further notice. The lawyers also directs the debtors to pay the money at their offices that are located at the City Council.
"We have been instructed to demand as we hereby do payment of the full amount which is inclusive of our collection commission by not later than June 9 2017 failing which we shall institute legal action for the recovery of this amount and all further legal costs which our client will incur in the process will be met by yourself," said the letter from Tsara.
In one of the letters by the lawyers, the business people were threatened with legal action that would see their properties being attached and sold should they fail to pay the debts.
"We should warn that should we issue summons, these costs will increase and we may proceed to attach your property to recover all outstanding amounts. We hope you will avoid paying more and having your property attached for the debt, by paying before summons are issued," read part of the letter.
The debt collectors' commission is 10% and the job will see them earning $600 000.
Town Clerk, Adolf Gusha confirmed the development and said Council has an obligation to collect rates to keep the city running.
"The Council requires $90 000 a month to pay for electricity to treat water that we drink, $35 000 a month for electricity for the sewage treatment plant and many other costs which are critical for running the City. We have an obligation to collect the money to provide services otherwise we risk closing the City," said Gusha.
The business people were however angry that debt collectors were being involved in the matter and therefore worsening their already precarious financial situations.
"They are unleashing lawyers on us at a time when the country is basically dry, there is no money businesses are bleeding and Council is adding salt to an injury. This is cruelty," said a visibly angry shop owner from Mucheke who declined to be named for fear of victimisation.
One small shop owner at Mucheke owes $25 000 dating back to 2009.
"It is unfortunate that it has come to this because they did not heed our clarion call to come forward with a payment plan. I have been on record calling upon ratepayers to come forward whenever they face challenges and engage council for a workable solution," said Masvingo Mayor, Cllr Hubert Fidze.
All the premises that are in arrears have had their water disconnected and Fidze said under normal circumstances the businesses should be shut down but they are not doing that on humanitarian grounds. By the time of going to Press, shop owners from Mucheke had held over three meetings with the Mayor over the issue.
Some businessmen alleged that the council was converting Zimdollar bills to US Dollar bills.
"We cannot just watch the council rip us off like that, they did not properly convert the currency to the US dollar which we are using now, because a million of Bearer Cheques is just a one bond or US$1," said one businessmen who declined to be identified.
 Dr Frederick Kasese, a business consultant said, "There is need for dialogue because remember once we tie a chain be careful that the other end is not tied to your neck because when they sink you also go down with them".news

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The Mirror: $6m debt: City hands businesses to debt collectors
$6m debt: City hands businesses to debt collectors
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The Mirror
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