The City of Joburg has won an appeal at the Advertising Standards Authority (ASA), against a ruling that said its claims of being financially stable “world class African city” is misleading, and should be withdrawn.
In July, a consumer lodged a complaint with the ASA, arguing that The City of Johannesburg Metropolitan Municipality’s radio advertisements contained blatant untruths.
The radio ads claimed that Joburg is financially stable, saving the environment, and creating new jobs despite the economic downturn using its “world class African city” campaign.
In arguing the case, the complainant highlighted that the city of Johannesburg had received three consecutive qualified audits, adding that R12 billion worth of revenue is being written off this year as “unlikely to materialise”.
He also disputed the city’s claims of being environmentally friendly, saying that the city loses R1.2 billion worth of electricity each month, and loses water to the value of R800 million per month.
At the time, the City Of Johannesburg acknowledged the complaint, but did not try to defend its advertisement through a response, which subsequently led to the ASA upholding the complaint and ordering the city withdraw its adverts.
However, on 22 July 2013, the City of Joburg filed and won an appeal against the ASA’s ruling, providing various documents which indicated the strong financial position of the city.
The city also pointed out that financial ratings by ratings agencies Moody’s and Fitch also noted positives on the city’s finances.
In the subsequent hearings, City of Joburg highlighted that the auditor general’s report states that “the consolidated statement of financial position shows that the total assets exceed total liabilities fairly valued”.
“On the proper analysis of the auditor general’s report, as well as the additional evidence adduced from the rating agencies it is clear that the appellant is entitled to make the claim that it is financially stable,” the ASA said.