Keetmanshoop Chief Executive Officer (CEO), Desmond Basson stands accused of having single handedly awarded a debt collection tender to Redforce Debt Management in 2017. The City Council has claimed this was done without approval.
This comes as Basson is currently threatened with a disciplinary hearing by the council on charges of gross negligence and non-compliance with the Local Authority Act in another matter.
The revelation comes as Redforce Debt Management has taken the southern town council to court demanding the payments of N$1.6 million, N$1.8 million and 20 percent interest on each payment.
According to court documents in possession of Windhoek Observer, Keetmashoop municipal council claims that the tender to collect millions in debt owed by the town’s residents does not constitute a valid agreement, thus it is under no obligation to pay Redforce Debt Management.
The municipality also claimed despite Redforce’s services, its debtor’s book increased by 21 percent during the contracted debt collection period.
“Redforce failed to perform in accordance with the terms of the tender and the value of the services actually rendered by [Redforce] in purported fulfillment of the tender does not exceed the amount of N$2,920,381.05 which [Keetmanshoop Council] has already paid to Redforce,” read the court documents.
The council furthermore claimed that were no monthly reports in respect of collections provided to Keetmanshoop. It was not mentioned whether the contract in question required this.
“[Redforce] did not assess or report to [Keetmanshoop] on the prospects and cost effectiveness of the recovery debt and [Keetmanshoop] failed to collect arrear debts. In fact, [Keetmanshoop]’s debtor account increased with 21 percent during the period Redforce alleges to have rendered debt collection services to the town.”
Keetmanshoop Mayor Gaudentia Kröhne confirmed to Windhoek Observer that the town council was not impressed with Redforce’s level of performance. She feels they did not keep up their end of the contract.
“They would just sit in the office and make calls, telling people who were in arrears to come and pay.” The mayor noted that the debt collection company was no longer collecting for the southern town.
“It was a two-year contract which has lapsed. That contract was not renewed.”
The Keetmanshoop council is accused of failing or refusing to hand over to Redforce all the debtor accounts which had gone over 90 days due, between January and June 2019, in order for the debt collection company to render its debt collection services, “as per the agreement.”
The Keetmanshoop council, however, has denied the claims, stating that it was under no obligation to hand over its debtor’s accounts for the given period.
When contacted for comment, Redforce CEO, Julius Nyamazana was legally bound to not comment in detail on any aspect of the case as the matter is sub judice.
“The matter is before the courts so I cannot comment on that,” said Nyamazana.
The matter involving Redforce comes as the debt management company has previously courted controversy after farmers complained of its heavy handed approach when it had been engaged by Agribank to collect debts on its behalf, a contract which has since expired.