Cape Town - Wendy Machanik, the disgraced estate agent and
former CEO of Wendy Machanik Properties has broken her silence about the events
that brought the curtain down on her property empire.
In an opinion piece published in the Business Day on Sunday,
Machanik admitted guilt and took full responsibility for her actions.
"I'd like to hereby state clearly and unambiguously
that, yes, I am guilty of unlawfully accessing my company's trust fund to the
value of over R17m - but not in the manner or for the reasons portrayed.
I write this not to justify my actions, for which I will be
forever deeply regretful, but to serve as a cautionary tale to all business
people and government officials who may find themselves in a similar
predicament to that in which I found myself five years ago," Machanik
She notes that prior to 2007, Wendy Machanik Properties had
grown into one of the most successful property companies in Gauteng and Cape
Town. It all changed when the global financial crisis struck in 2007, with South
Africa's property sector being the hardest-hit.
"We instituted massive cost-cutting measures across the
board in order to keep the business afloat, including closing several branches.
By 2008 our revenue was slashed by two-thirds, we had around 160 employees and
we were still haemorrhaging cash. In order to try and stop the bleeding I took
out massive loans and poured my personal savings into the business. But it
Looking back now I know what I should have done. I should
have allowed the company to fold, declared bankruptcy, and walked away. But I
couldn't allow myself to do that. I felt it was my responsibility to my
employees and their families they were supporting. So I did the unthinkable. I
accessed the trust account in order to save the business.
Over a three-year period I had accessed the account over 90
times. As cash came into the business, it went back into the trust. By 2010 I
had not only replaced all the monies owed to the trust account, there was
actually a surplus of over R1.2m. The market had picked up, the business was
solvent again and I was able to repay all the emergency loans. No customers had
been adversely affected by the transactions," Machanik said in the
She adds that everything unravelled when someone within the
company blew the whisltle after she refused to pay them "a certain sum of
money". The Estate Agents Affairs Board was notified and soon after a
formal inquiry was opened.
"Today my fate has been decided by the court. Among
other penalties, I have been stripped of my real estate licence and I'm about
to commence long-term house arrest.
In the end, though, I take full responsibility for my
actions," she said.
The court reportedly fined Machanik R1 000 (or a year's
imprisonment), suspended for three years, for failing to keep and audit
She was also reportedly sentenced to three years'
correctional supervision and was fined R1.5m, R300 000 of which she would pay up
front, and the rest in R25 000 monthly instalments.