Civil servants say loan deductions unlawful
MASERU — A group of civil servants is demanding that the treasury department stops deducting their salaries to pay their debts to three troubled prominent money lenders.
The civil servants are suing Select Management Services, Afrisure (EEZY Management Services) and B-Blue financial services for unlawful terms and conditions contained in the companies’ loan contracts.
They complain that the three companies are demanding excessive interest rates as opposed to the 25 percent interest allowed by the law governing money lenders.
The civil servants on August 4 wrote a letter through their lawyers, K E M Chambers, to the Accountant General and the Attorney General requesting them to instruct the treasury department to stop deducting their salaries to pay the three companies.
They suggested that the deduction, which are made by a way of stop order, should stop with effect from the end of August.
The letter written by their lawyers reads: “We have instructions to write to you informing you that our clients have served upon the Accountant General and the treasury notices of stop order instructions.
“In terms of the said instructions, clients have instructed the treasury to stop deductions from their salaries to the following companies and/or entities, viz; (a) Afrisure (EEZY Management Services) (b) Select Management Services and (c) B-Blue.”
Civil servants’ lawyers have also threatened to sue the government if the treasury did not agree to stop deductions with effect from August.
“We have instructions to demand from the government of Lesotho that the said instruction by our client be respected and complied with forthwith, failing which, should any deductions be made from clients’ salaries by the end of, or in respect of the month of August 2009 and onwards, clients will have no other alternative but to sue the government of Lesotho in respect of the said deductions,” the letter reads.
“By copy of this letter the aforementioned money lenders are hereby informed that clients hereby cancel the agreement between them and the said money lenders.
“The purpose of this letter is to terminate and cancel the contracts between the money lenders and clients forthwith,” reads the letter.
The government and the group of civil servants are likely to engage in a court battle because the government says it is not ready to stop deductions from the aggrieved civil servants with effect from August despite threats by the civil servants’ lawyers to sue.
In his responding letter the Deputy Attorney General Tsebang Putsoane said the government could only stop deductions with effect from September.
Putsoane said the civil servants brought their request when the treasury had already started preparing payments for this month.
The civil servants’ request was made on Tuesday last week, while Putsoane’s letter was written last Friday but was received at K E M. Chambers on Monday.
“Our instructions are that our client will act as instructed by your clients. Our client has however instructed us to inform you that it is now too late to stop August, 2009 payments as they have already started or about to start running the payroll for the month of August 2009.
“To act as instructed by your clients now may affect the whole process of payment of salaries to public officers on time.
“Your clients’ instructions will be effected with effect from the coming month of September, 2009,” Putsoane said.
The civil servants’ lawyers dismissed Putsoane’s contention that it was too late to stop deductions with effect from this month.
The lawyers wrote to Putsoane on Tuesday informing him that stopping deduction was an easy exercise that needed not to be complicated.
“Clients instructed that they are the ones that deal with processing of such payments and that between now and the end of the week, there is still time for such payments to be stopped.
“They have not yet started running the payroll. They further instruct us that the stoppages can even be done over-night and it does not even require two days to effect such stoppages once an instruction is given,” the letter reads.
The correspondence between civil servants’ lawyers and Putsoane came in the midst of a court battle between the civil servants and the three money lending institutions.
In their suit the civil servants are asking the High Court to declare terms and conditions set by the three institutions in their loan contracts unlawful.
Their lawyer Advocate Kananelo Mosito on Tuesday urged the High Court to treat the case as an urgent issue because they (servants) were already prejudiced by the deductions.
Mosito said the court should rescue his clients from the unlawful practices by the money lenders which he said have imposed huge interest rates on his clients.
However the lawyers for the money lenders have urged the court not to deal with the case on an urgent basis.
Advocate Motiea Teele who is representing the money lenders said there was no urgency on the case because the applicants did not give detailed circumstances that make their case urgent.
“A mere fact that they say there has been continuous deduction of money does not constitute urgency.
“They should tell the court what hardships they suffer if the case does not proceed on an urgent basis,” Teele said.
The civil servants allege that the money lenders charged as much as 62 percent interest, a practise which they said was contrary to the law which allows 25 percent interest.
High Court Judge Tséliso Monaphathi still has to make a ruling on whether the case should be dealt with on an urgent basis or not.