Correctional Services spokesman Manelisi Wolela has denied allegations that student leader Mcebo Dla.
A man was stabbed to death by his friend when he failed to pay the R2 he owed him.
The deceased, Bonginkosi Mkhize, was stabbed four times by his friend at Umlazi's F section informal settlement in KwaZulu-Natal on Saturday.
Police spokesman Khephu Ndlovu said the suspect fled the scene after stabbing the deceased twice in his back and twice in his left hand.
Ndlovu said they know the identity of the friend, but he is on the run and they have launched a search for him.
He said they are determined to arrest the suspect soon.
"At this stage the only information we have is that the suspect demanded his R2 coin from the deceased," Ndlovu said.
"When the deceased failed to pay the R2, the argument erupted," he said.
l In a separate incident two people were killed and a third is recovering in hospital after they were shot by well-known gangsters in the Umlazi area near Durban on Saturday night.
Mduduzi Majola, 25, died on arrival at Prince Mshiyeni Hospital and Bongumusa Phungula, 16, died at the scene.
Ndlovu said it was not yet clear if the incident was drug- related. No arrests have been made.