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Agency board rejects Machanik's claims

May 31 2011 13:18
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Johannesburg - The Estate Agency Affairs Board (EAAB) has rejected "unfounded and unsubstantiated allegations" raised by former estate agent Wendy Machanik at a commercial crimes court hearing on Monday.  

Machanik's criminal case was postponed to July 21 to allow the director of public prosecutions to consider representations made by herself and her two co-accused.

Among these submissions was that the EAAB had used monies from its fidelity fund to pay staff salaries and other expenses.

"The facts, and the EAAB's audited financial statements in respect of both itself and the Estate Agents Fidelity Fund (EAFF) for the periods from 2005 to 2010, unambiguously show that any allegations suggesting the unauthorised use by the EAAB of EAFF monies are not only completely devoid of substance but also baseless," the EAAB said.

"There is neither merit nor truth to the averments attributed to the former CEO of the EAAB that the EAAB was either 'bankrupt' or using monies from the EAFF without authorisation."

The EAAB added that any such activity would have raised an exception in the audit of both the EAAB and the EAFF.

"The audited financial statements contain no such qualification and, indeed, show that the EAAB had surplus cash over all the financial years concerned after paying its own expenses."

The EAAB said that at no time had the funds of the EAFF been used for purposes other than those prescribed by the Estate Agency Affairs Act, or to fund the expenses of the board.

"Had the averments contained even an iota of substance neither the EAAB nor the EAFF would have received unqualified audit reports."

The EAAB said it was mandated by the act to control and manage the EAFF.

"The act, furthermore, permits the EAAB to pay from the EAFF, whenever it is required, the expense involved in the control of the fund, including remuneration and allowances to members of the board in connection with the management of the fund.

"The board, in giving effect to the provisions of the act, has authorised, as the act permits, the payment of an administration fee, which changes from time to time as circumstances warrant, from the EAFF to the EAAB. The administration fee is, furthermore, fully dealt with and properly accounted for in the audited financial statements of both the EAAB and the EAFF."

The EAAB emphasised that the act gave it full discretion on whether or not to pay, out of the EAFF, interest on any claim that had been admitted against the EAFF.

"Claims committees of the EAAB consider such claims and make suitable recommendations on their payment or otherwise to the board. Such recommendations include the question of whether or not the board should, in the exercise of its statutory discretion, pay interest to claimants."

Machanik, as well as Wendy Machanik Property and its chief financial officer, Bruce Bernstein, have been charged with counts relating to allegedly making irregular transfers totalling R28m from Wendy Machanik Property's trust fund to a fictitious account and misusing trust monies.

eaab  |  wendy machanik  |  estate agents



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