Xaba: Toyota insurer lawsuit could trigger flood of claims
eThekwini Mayor Cyril Xaba has raised concerns that a lawsuit brought by Toyota South Africa's insurer might trigger more legal claims against the City.
The municipality could face a massive legal bill linked to damage suffered by the car manufacturer during the April 2022 floods.
The automaker’s insurer, Tokio Marine & Nichido Fire Insurance, is demanding over R6.5 billion from the City, Transnet and the KZN Transport Department.
Toyota’s Prospecton plant was severely damaged during the floods, which brought production to a halt for several months.
The company has clarified that it is not handling the legal action.
Speaking at an EXCO meeting on Tuesday night, Xaba said the lawsuit could raise doubts among residents about the city’s leadership.
" I'm planning to meet the Toyota top management soon to understand the rationale behind this move. The city cannot afford this."
Xaba admits the municipality has been losing court cases due to weak contract management and poor internal controls.
" Maybe the city manager has addressed some of the administrative issues. As a political head of the institution, I must assure the members of the public that we are working on tightening internal controls to address these governance issues, which paint us in a negative light.
"We call upon management to aggressively re-evaluate its systems with the aim of closing these serious gaps in our contract management environment."
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