City of Joburg Owes Lawyers and Debt Collectors Over R500 Million Amid Corruption Allegations

The City of Joburg is facing a financial and legal storm as over 90 lawyers, advocates, and debt collectors claim they are owed more than R500 million for debt recovery services. The crisis, compounded by allegations of corruption and backdoor deals, has left service providers unpaid for seven months, forcing some businesses to the brink of collapse.

Debt Collectors Left Unpaid While City Recalls Accounts

The affected professionals were part of the A910 Specialised Revenue Collection Panel, appointed in 2022 to help the metro recover outstanding municipal debt. However, on February 14, 2025, the city informed them that their services would be terminated, and all accounts previously handed to them would be recalled as of March 14, 2025.

The decision has left many questioning why the city would halt a debt collection process that was bringing in revenue.

“This month marks seven months without payment. Many small businesses are on the verge of collapse due to the high costs of litigation and operations,” said one debt collector.

Corruption Allegations Surface

The recall of accounts has fueled allegations that some city officials are accepting bribes from debtors in exchange for erasing their outstanding balances.

“Debtors owing large sums of money cut deals with administrators. The cash collected from them never reaches the city’s bank account but instead ends up in the hands of corrupt officials,” an insider revealed.

This has raised serious concerns about potential revenue loss, as debts that should be recovered are allegedly being written off in exchange for illicit kickbacks.

City of Joburg Responds

City of Joburg spokesperson Kgamanyane Maphologela stated that the metro is reviewing all outstanding claims.

“Any verified claims will be processed in accordance with contractual obligations. The city is working to resolve any payment delays as efficiently as possible,” he said.

On corruption allegations, Maphologela denied any wrongdoing.

“The city takes financial misconduct and corruption seriously. However, we have not received any formal complaints about officials collecting money directly from debtors,” he added.

Financial Crisis Deepens for Debt Collectors

With pending legal cases, unpaid invoices, and no clarity on when payments will be made, affected legal firms and debt collectors are facing an uncertain future.

Many argue that if the city was successfully recovering funds, why recall the accounts instead of ensuring the service providers are paid?

As pressure mounts, industry insiders are calling for a formal investigation into the city’s handling of debt collection to uncover any corrupt dealings and financial mismanagement.

With Johannesburg’s finances already under strain, the fallout from this crisis could have far-reaching implications for the city’s revenue collection and governance.

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