"The municipality would like to warn residents that mayor Gumede has not asked for such donations and is not part of the scheme. This is a scam and anyone who is approached by these unscrupulous individuals must report the matter to the nearest police station," the statement read.
Acting head of communications Mandla Nsele said the municipality had decided to take a proactive approach to warn residents as it had heard a number of rumours.
"We are investigating these rumours and have not yet received any solid evidence of anyone being scammed. We don't know who is behind this or who these people are," said Nsele.
The case against Gumede, Mthembu, Poonan and several others is expected to proceed in August.