Menu
Login
I am an employee of Rakoma and Associates Inc, a firm of accountants and auditors run by Edgar Rakoma. Rakoma and Associates has only paid me and the rest of the other staff members only one month's salary since January 2011. This is because the firm is not paying tax to SARS. This has led to our situation and I want all current and prospective clients to deal with these unprofessional accountants at their own risk.
I am the Director of a Professional Quantity Surveying / Project Management practice in the Eastern Cape. We have been appointed by Rakoma and Associates in January 2011 to render professional services for their East London office. We completed our assignment and submitted to Rakoma and Associates in February 2011. Our payment agreement was 30 days after submission of fee account.
Our first fee account was paid after numerous calls, e-mails and other correspondence, 193 days after submission. Our second and final fee account is now outstanding for over 110 days. Mr Edgar Rakoma and his Assosiates have send us from pillar to post and because of that we are currently distributing pamphels in the Eastern Cape warning current and prospective clients of Rakoma and Associates.
Our opinion is that Rakoma and Associates is unprofessional, unethical and incompetent, be warned!
The matter of Rakoma and Associates Incorporated vs. Eugene Lewis Consulting CC
Background
Rakoma & Associates Inc. appointed Eugene Lewis Consulting CC to perform a valuation of buildings on its behalf for one of its clients. The consulting fee agreed to for this assignment was for an amount of R 80 000 inclusive of VAT. However, after the completion of the assignment, Eugene Lewis Consulting CC requested full payment of R 80 000 as they claimed to have performed the work. Rakoma & Associates refused to settle the full amount due to the following reasons:
1.It is our firm's policy that for all the consulting engagements, the firm agrees with its clients to retain a percentage of the engagement fee ( of between 10% and 30%) up until the project is successfully completed and our client is satisfied with our delivery of the final report or that all the outcomes or milestones of the project was achieved.
2.This is done to demonstrate our firm’s commitment to the project.
3.Furthermore, to demonstrate our self believe in achieving the required output
4.It also indicates that we as a firm have something to lose in event of non-delivery or poor performance on the project.
5.Not to allow the status quo to continue, of our clients getting qualified audit reports whilst our firm is fully paid.
6.This ensures that our clients have recourse in the event of non-delivery.
Our firm has always adopted the above policy for all our clients. As a reputable firm of chartered accountants and auditors it is against our fundamental principles to expect our clients to pay 100 percent of the fee whilst the work is still in the process of being reviewed for quality or being audited.
Facts of the matter
We received the valuation report from Eugene Lewis Consulting CC in respect of the work that was contract to it however; a high level of errors was found to be contained in their report. We were not satisfied and as can reasonably be expected neither was our client satisfied. This almost resulted in our client’s financial statements being qualified due to a R [protected] error.The risk of the embarrassment to the firm’s image and that of its partners and as well the damage to our brand was too high. We worked very hard to correct the errors and as a result our client received a clean audit report at the end.
Initially we took a decision, as a firm, not to pay Eugene Lewis Consulting CC as the level of errors was too high and the quality and standards of their work was inadequate. We deliberated further on the matter and agreed that we would support Eugene Lewis Consulting CC as the business was still new and this type of problems was not unexpected during the upstart phases of any business.
The nature of our business is such that it takes on average 60 days to be remunerated for services rendered. While our firm was in the process of collecting our billings in respect of the assignment in order to pay, Eugene Lewis CC, Mr. Eugene Lewis the sole member of the corporation, spray painted our office buildings with red paint, inscribing among other things that “…Rakoma & Associates are liars, crooks and people must stay away…” This act in itself was vandalism to our landlord’s property and constituted a criminal offence. However, being reasonable our firm decided not to institute a criminal action against Mr. Lewis by laying a charge with the South African Police Service.
In fact we decided to engage Mr. Lewis in order to see if we could not amicably resolve the matter. We tried to telephonically contact Mr. Lewis on a number of occasions with the aim of obtaining an understanding for his malicious actions. He neither answered nor responded formally to us but, he did send messages via sms back saying that he is busy with exams in Port Elizabeth. Mr. Lewis never responded or contacted us us to discuss the matter.
Rakoma & Associates Inc.paid Eugene Lewis CC an amount R52 000 on ………. with a view to settle the outstanding balance of R28 000 at a later date. We again requested a meeting with Mr. Lewis in order to agree on how to go forward to fix our landlord’s building but, he refused.
Three weeks later Mr. Lewis started sending e-mails to one of our staff members threatening that “he will be circulating pamphlets around East London with our firm’s name telling people that we are crooks”. Again we made a follow up telephone calls to Mr. Lewis explaining the situation and even going as far as assuring him that he can contact the client and that we are still owed money by our client. On this occasion Mr. Lewis was very rude over the phone indicating that he did not want to speak to us. We could not locate Mr. Lewis or his corporation at an office as it does not seem to occupy any business premises.
Rakoma & Associates Inc. continued to hold out and offered to pay the outstanding balance of R 28 000, on the condition that we either deduct R 5 000 to repair the paint damage caused to the building or that Mr. Lewis repair the damage himself. Mr. Lewis refused both options above and proceeded to post statements on the Complaints Board website. We have pursued all reasonable options to resolve this matter with Mr. Lewis and would normally not respond to false allegations like this but; we have now decided that we cannot afford to allow this matter continue on this course.
Mr. Eugene Lewis has on a number of occasions alleged that we (Rakoma & Associates Inc.) are “…unethical, crooks, lairs and incompetent”. We wish to categorically state that as a firm, we fully comply with all the ethical rules and requirements of both the Independent Regulatory Board of Auditors (IRBA) and the South African Institute of Chartered Accountants (SAICA) of which we are members. Failure on our part could result in non-compliance and cause our suspension from these professional bodies. As for being incompetent, our track record over the past five years speaks for itself. We go as far as to offer our clients the terms mentioned above, because we believe that we can deliver at the highest level. We have not written off any retainer amount over the past five years since we started operating.
We agree to pay Eugene Lewis Consulting CC the amount R 23 000 before 30 September 2011. However, we strongly believe that Mr. Eugene Lewis’ personal issues with our firm are way beyond the R28 000 in question. We are of the view that he has other personal agendas which; we are not aware of as firm.
Conclusion
We urge Mr. Lewis to use the time and resources he is incurring buying spray paints, posting false and malicious statements on websites and designing and printing pamphlets about our firm to instead focus on growing his business. It is hard work to build a sustainable business.
Yours faithfully
Samkelo Mxunyelwa CA (SA)
Rakoma and Associates Inc
Registered Auditor
Chartered Accountants SA
Just one question Mr. Rakoma, why haven't we receiced any commuinication from you regarding our errors?
As per my previous correspondence why Rakoma and Associates is struggling with the approval of quality audits, they performed work which was meant for building professionals and they used staff members which had no clue what they were doing and therefore we had to rectify their work, we got proof.
Just in connection with your claim that I painted your building, again as per my previous correspondence to you go the legal route so that I can defend myself in a court of law. I think it is convenient to blame me, what about your previous staff members claiming non-payment of salaries due to you not paying SARS?
Today, it's the 01 February 2012 and Rakoma and Associates still owes me back-pay cheques. I left that firm in 31 May 2011 and to this day there is NO payment. I have been referred to a woman called Charlane Douman who is as gangstar as a drug lord in the Cape Flats. She has been promising to "sort" me out everytime she took my phone call by accident. I have decided to take it with the Labor and Small Claim court. They are going to pay each and every cent even if they have to pay monthly instalments of R200 a month for the next 10 years they will pay me every cent they owe PLUS SINCE THEY WERE NOT CONTRIBUTING UIF they should also pay it to me because i will not be able to claim it in future. I was not a voluntee, We signed a legal employment contract. I am taking a stand today - i refused to be cheated! If you ever decide to do business with them...well, i think i don't need to sell it out.
Rakoma ### is still having a lot to do if all these allegations are true.
Owaiiiii..Rakoma and Associates are a bunch of crooks and as for Edgar Rakoma he is a gangster personified. He is busy opening offices around the country not because the firm is growing but because everytime the firm creates a bad name for itself in an area, it is time to move to the next area...Hahahhahha... How is the Northern Cape office doing Sir?