Wendy Machanik speaks out

Dec 02 2012 16:13

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 said.

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 wasn't enough.

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 article.

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 accounting records.

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.


Follow Fin24 on Twitter and Facebook

wendy machanik  |  fraud  |  property



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What’s on your gift list this Christmas?

Previous results · Suggest a vote