Redforce sues Walvis over ‘political’ contract termination
Agent says defaulters won the day
The company says its rights were violated willy-nilly by the unjust termination of its contract and that it collected N$84 million in seven months.
The decision by the Walvis Bay municipality to terminate the debt-collection contract with Redforce last week was purely political rather than professional and was based on lies that councillors were not consulted when Redforce was awarded the contract, the latter said in an urgent court application filed on Saturday.
The motion to remove Redforce was tabled by Swapo councillor for the Walvis council, Ephraim Shozi, at a special council meeting held last Tuesday evening.
Shozi accused the municipality's management of failing to secure council’s blessing when it advertised the bid for debt collection, for which Redforce was granted a five-year contract.
Selma Nangombe, Redforce’s majority owner and its chief operations officer, filed an urgent application on Saturday, in which she sought to poke holes into councillors’ claims that they were kept in the dark by management.
She argued that on 8 March, 2022, when Redforce – on its own initiative – gave a presentation to the Walvis management and councillors about its desire to provide debt collection services to the municipality, Shozi was among the attendees.
Public announcement
Disputing the claim that councillors were not informed, Nangombe said in March 2023, the municipality publicly advertised a bid seeking a debt collector, to which Redforce applied and was announced as the successful bidder in major local newspapers and on public social media platforms.
As part of the contract, all municipal accounts in debt for 60 days or more would be handed over to Redforce for collection. These accounts, over 10 000 of them, owed the municipality over N$337 million at the time.
In terms of termination of contract, the agreement states that this may happen if Redforce fails to perform its duties as stipulated in the contract or when it is in the interest and convenience of the municipality to do so.
‘Political’ expediency
Nangombe, who is adamant the decision to terminate the contract was a result of political pressure in an election year, said the grounds provided for last week’s termination do not speak to the conditions of termination stipulated in the contract.
“No such factual inquiry is applicable to the impugned termination in this case,” she argued.
Performance-wise, Redforce says it collected N$45 million in the first three months of its contract after kicking off operations in Walvis Bay in August 2023. By March this year, it had collected N$84 million for the municipality, Nangombe said.
“Prior to Redforce’s appointment, the [municipality] was operating on a cash flow deficit of N$4.6 million. At the time of termination, the [municipality] was operating at a surplus of N$45 million,” Nangombe said in court papers.
“In short, this application is not only brought for the survival of [Redforce], but also to save the [municipality of Walvis Bay] itself,” she argued.
Yielded to pressure
She said debtors "hate" debt collectors, so the recent protests at Walvis Bay, where residents demanded the removal of Redforce, were naturally expected.
“In the simplest terms, the [municipality's] debtors who do not pay their municipal accounts were applying pressure to have Redforce removed because Redforce made them pay their accounts and they did not like that.”
Redforce says the contract stipulated that it should establish an office in Walvis Bay, which it did, staffing it with 27 employees, compared to the municipality's two staff members who perform the same functions. Its office space costs N$276 000 per year in rental fees and the company bought two cars for N$575 000 for its Walvis operations.
Redforce says its biggest sin in the eyes of residents was when the company implemented water disconnections on 6 March this year. Redforce explained that water disconnections are one of the most effective tools to compel residents to pay their dues.
In terms of relief sought, Redforce wants the court to order the municipality to reinstate the contract while the parties consult each other to find a sustainable resolution that’s fair and just for all involved.
The motion to remove Redforce was tabled by Swapo councillor for the Walvis council, Ephraim Shozi, at a special council meeting held last Tuesday evening.
Shozi accused the municipality's management of failing to secure council’s blessing when it advertised the bid for debt collection, for which Redforce was granted a five-year contract.
Selma Nangombe, Redforce’s majority owner and its chief operations officer, filed an urgent application on Saturday, in which she sought to poke holes into councillors’ claims that they were kept in the dark by management.
She argued that on 8 March, 2022, when Redforce – on its own initiative – gave a presentation to the Walvis management and councillors about its desire to provide debt collection services to the municipality, Shozi was among the attendees.
Public announcement
Disputing the claim that councillors were not informed, Nangombe said in March 2023, the municipality publicly advertised a bid seeking a debt collector, to which Redforce applied and was announced as the successful bidder in major local newspapers and on public social media platforms.
As part of the contract, all municipal accounts in debt for 60 days or more would be handed over to Redforce for collection. These accounts, over 10 000 of them, owed the municipality over N$337 million at the time.
In terms of termination of contract, the agreement states that this may happen if Redforce fails to perform its duties as stipulated in the contract or when it is in the interest and convenience of the municipality to do so.
‘Political’ expediency
Nangombe, who is adamant the decision to terminate the contract was a result of political pressure in an election year, said the grounds provided for last week’s termination do not speak to the conditions of termination stipulated in the contract.
“No such factual inquiry is applicable to the impugned termination in this case,” she argued.
Performance-wise, Redforce says it collected N$45 million in the first three months of its contract after kicking off operations in Walvis Bay in August 2023. By March this year, it had collected N$84 million for the municipality, Nangombe said.
“Prior to Redforce’s appointment, the [municipality] was operating on a cash flow deficit of N$4.6 million. At the time of termination, the [municipality] was operating at a surplus of N$45 million,” Nangombe said in court papers.
“In short, this application is not only brought for the survival of [Redforce], but also to save the [municipality of Walvis Bay] itself,” she argued.
Yielded to pressure
She said debtors "hate" debt collectors, so the recent protests at Walvis Bay, where residents demanded the removal of Redforce, were naturally expected.
“In the simplest terms, the [municipality's] debtors who do not pay their municipal accounts were applying pressure to have Redforce removed because Redforce made them pay their accounts and they did not like that.”
Redforce says the contract stipulated that it should establish an office in Walvis Bay, which it did, staffing it with 27 employees, compared to the municipality's two staff members who perform the same functions. Its office space costs N$276 000 per year in rental fees and the company bought two cars for N$575 000 for its Walvis operations.
Redforce says its biggest sin in the eyes of residents was when the company implemented water disconnections on 6 March this year. Redforce explained that water disconnections are one of the most effective tools to compel residents to pay their dues.
In terms of relief sought, Redforce wants the court to order the municipality to reinstate the contract while the parties consult each other to find a sustainable resolution that’s fair and just for all involved.
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