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Estate agency administrator appointed

Aug 16 2012 16:25
Cape Town - Lawyer Taswell Papier has been appointed administrator of the Estate Agency Affairs Board (EAAB), Human Settlements Minister Tokyo Sexwale said on Thursday.

Briefing journalists in Parliament, Sexwale said the need for an administrator was urgent following a "series of disturbing events" which had affected the estate agency industry.

These included the Wendy Machanik saga, the acrimonious departure of the EAAB's CEO Nomonde Mapetla, and the Auction Alliance debacle.

Sexwale said it was unclear how deep the rot was, and the administrator and Special Investigating Unit (SIU) would separately help determine the extent of wrongdoing in the industry.

"There's a stench here. How far does it go back, I don't know."

The minister said he was initially in no hurry to jump in and get involved. But the suspensions and resignations at the board forced his hand. Last month Sexwale announced the dissolution of the board and the appointment of a Special Investigating Unit team.

"I don't want to at this stage speculate how deep things have gone wrong. But, I heard from stakeholders in the industry about the fidelity fund... there's been some suspicious things. I heard about the handshake given to the previous CEO," Sexwale said.

Mapetla was given a R3 million rand golden handshake after she was suspended. Her contract was later terminated. Suspected fraud in the industry's fidelity fund was also being probed.

Estate agencies and agents were expected to contribute to the fidelity fund, used to guard against theft or fraud by attorneys and agencies. The size of the fund was unknown. It was established in the late 1970s.

Estate agent Machanik and her chief financial officer, Bruce Bernstein, were arrested last year. They face charges of conspiracy to commit fraud, failure to keep accounting records, and failure to reflect over 100 transfers between the company's trust and business accounts. The amount involved was about R28m. The matter would be back in court in October.

Papier, former president of the Law Society of the Cape of Good Hope, would now essentially perform the functions of both the board and CEO for a six-month term.

"He is expected to implement appropriate turn-around strategies... implement (a) financial control system... provide strategic leadership and capability to the organisation to restore its reputation, ensure sustainability and organisational efficiency, and implement the organisational strategic business plan as well as monitoring its performance," Sexwale said.

The SIU would hold a separate inquiry.

The minister did not rule out involving the police should there be resistance to the administrator, or if EAAB staff refused to hand over, or shredded, certain documents.

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