End of the line for Prasa as frustrated law firm resigns over unpaid millions
Werksmans drops rail company for not paying R7.8m invoice
Werksmans Attorneys has unequivocally severed ties with the Passenger Rail Agency of SA (Prasa).
The law firm’s decision to withdraw its services was made after Prasa committed to an outstanding payment by January 31 but failed to pay it. This is according to a letter addressed to Bongisizwe Mpondo, the administrator of Prasa, by David Hertz, chairman of Werksmans Attorneys. The letter is dated February 3.
Mpondo was appointed in December by minister of transport Fikile Mbalula, who disbanded the Prasa board.
In January, Werksmans wrote a letter to Prasa threatening to withdraw its services due to R19m in outstanding fees. Werksmans also withdrew representation of Prasa in its litigation against Siyangena Technologies.
Prasa, according to Hertz’s letter, responded to Werksmans, writing: “The Group CFO has assured me that in the next pay run (month-end) we will be in a position to pay all the disbursements that you have incurred with your suppliers in the matters that you are seized with. We will make payment of the remainder of the fees by the end of February 2020.”
On January 17, a Prasa executive sent a letter to Werksmans assuring the firm that Prasa “is in a financial position to pay all disbursements that have been incurred with all the suppliers in the matters that Werksmans is handling on behalf of Prasa”.
This “disbursement” amount, which Prasa committed to paying by January 31, tallied up to approximately R7.8m. Werksmans said it sent these invoices to Prasa on January 27.
Hertz, Mpondo and other Prasa representatives and Werksmans employees attended a meeting at Prasa’s offices on January 28 to “discuss the Siyangena matter”, according to Hertz. However, this was the last date that Werksmans heard anything from Prasa.
Werksmans decided to “formally and finally” withdraw from representing Prasa’s interests after the amount to be paid by January 31 was not paid, without any explanation given. Information with regards to the Siyangena matter was also not provided to Werksmans, even though Prasa agreed to do this by January 31.
Hertz’s letter reads: “We will now commence formal steps to recover amounts due to Werksmans, and further reiterate that until all payments are received, Werksmans retains a lien on all work done in all matters.”
Prasa had not commented by the time of publication.
- This article was first published by GroundUp