Auctions body denies ghost bids a norm

2012-04-18 14:12

Johannesburg - The SA Institute of Auctioneers (Saia) has denied a claim by former Auction Alliance chief Rael Levitt that “ghost bidding” is a common practice in the industry.

“Saia emphatically and categorically distances itself from Mr Levitt’s assertion that ghost bidding is not unique to him, and is the norm within the South African auction industry and across the world,” Saia chairpersonTirhani Mabunda said on Wednesday.

“Saia also disputes Mr Levitt’s statement that he has taken the brunt for the entire... industry.”

He challenged Levitt to name any other auctioneer or auction company practising ghost bidding.

Mabunda was briefing reporters in Johannesburg in response to Levitt’s comment in the Sunday Times newspaper on April 15, and because the allegations against him were “festering in the media“.


Levitt told the Sunday Times in an email that he did not deserve to be demonised by South Africa.

“I was the country’s most high profile auctioneer and I have taken the brunt for an entire industry,” Levitt was quoted as saying.

“The public has focused on ghost bidding as if it was unique to me... ghost or vendor bidding happens across the globe from venerable art auctions in London, to real estate auctions in Sydney and cattle auctions in Texas.”

His interview was the first since Auction Alliance was found guilty of contravening the Consumer Protection Act during the auction of the Quion Rock wine estate to billionaire Wendy Applebaum for R55m.

Applebaum lodged a complaint with the National Consumer Commission (NCC) in December after she claimed that another bidder, Deon Leygonie, was a ghost bidder acting on behalf of Levitt.

Mabunda said the public needed to know there was a difference between vendor or proxy bidding and ghost bidding.

With vendor bidding, fellow bidders were aware that someone might bid on behalf of the seller to keep a “reserve” price on a bid.

With proxy bidding, bidders were made aware that someone was representing a bidder not attending the auction.

Both were legal and commonly practised, Mabunda said.

With ghost bidders, fellow bidders were not aware of any proxy or vendor bids.

He said Auction Alliance was no longer a member of Saia because it did not renew its membership.

“More permanent solutions are required, and an industry code proposed by the NCC will serve such a purpose by prescribing minimum standards of qualification, licensing, ethics and professionalism for auctioneers,” Mabunda said.

“Depending on the funding model, the industry code will either be enforced through an ombuds scheme, or by the NCC.”


  • Simon - 2012-04-18 14:37

    "With vendor bidding, fellow bidders were aware that someone might bid on behalf of the seller to keep a “reserve” price on a bid." What a joke, that is just as bad. Basically it means that you end up paying more than you should. The entire point of an auction is that you purchase something at a price that is valid on the day in the auction room you are buying in.

      Eben - 2012-04-19 15:10

      They all do it - and you never pay more for it than you should because you and you alone decide when to stop

  • Anthony - 2012-04-18 14:42

    bullsh$t they all do it

  • patrick.saunders123 - 2012-04-18 15:02

    saia are well aware of the practise but have always turned a blind eye to it.

  • Wessel - 2012-04-18 15:42

    True story. My dad and I was shopping for a car. And weekly we would go to auctions at Burchmore's in Cape Town on Monday night auctions and week after week the same cars would be auctioned and won by the same people, as these buyers would be linked to Burchmores. Was so dissapointed by that and never returned to the world of auctions.

  • Serame - 2012-04-18 17:25

    Mmmm they are now hiding it on the technicality of "Proxy/Vendor Bidding"These guys are crooks me its all de same concept..Proxy/Ghost is the same thing..

  • bluzulu - 2012-04-18 18:38

    This inference from a criminal with no credibility.

  • hsnam - 2012-04-18 18:43

    Bollocks. Been there, done that. Happens all the time at property auctions.

  • derekneilmaclachlan - 2012-04-18 20:06

    I hardly go to a property auction in East London as we have one auction house....AND YOU GUYS KNOW WHO YOU ARE!!!!! wh pull bids out of the air all the time. You guys are scumbags and you know it!!!!

      Wilma Crous - 2012-04-18 21:08

      Nail them. Now is the time. Repirt it to SAIA. Let them investigate. If anything it'll make them think twice. There are good auctioneers out there, who get less auctions because they go according to the book!!

  • Mary - 2012-04-19 02:26

    Speaking from experience: Auctions are a total rip-off. Avoid them as if the proverbial devil himself was present.

  • Russell - 2012-04-19 09:49

    I saw it on an episode of a UK home buying show- they followed properties being purchased at auction and then being renovated. The expert was quite clear that 'bouncing bids off the wall' was common practice among auctioneers.

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