Fight over seized wine farm heats up

29 January 2012 - 02:06 By BOBBY JORDAN and ANDRE JURGENS
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NO ENTRY: The closed entrance to Quoin Rock, which is near Cape Agulhas Picture: ESA ALEXANDER
NO ENTRY: The closed entrance to Quoin Rock, which is near Cape Agulhas Picture: ESA ALEXANDER

Billionaire Wendy Appelbaum is lodging a formal complaint against top auctioneer Rael Levitt at the National Consumer Commission as the fight over a prime Cape wine estate turns nasty.

Appelbaum bid R55-million for Dave King's 194-hectare Quoin Rock estate outside Stellenbosch last month.

She said: "Our attorneys have formulat[ed] our response and we have reported the matter to the National Consumer Commission." She sent the complaint on Friday, citing concerns over the way the auction was conducted - featuring an anonymous rival bidder.

The glitzy event attracted some of the country's richest tycoons, including Randgold CEO Marais Steyn, Dimension Data CEO Allan Cawood and Shoprite Checkers CEO Whitey Basson.

Liquidators running the estate, seized from King by SARS in a tax dispute, did not accept her R55-million bid.

Levitt, the CEO of Auction Alliance, is adamant the auction was fair and described Appelbaum's concerns as a "storm in a wineglass".

In a further twist King warned buyers that the estate was still rightfully his and that he would not give it up without a fight.

The estate, which in its prime, cost up to R500000 a month to run, is now bleeding cash. Operating costs are now estimated to be around R300000 a month. Levitt and the liquidators are now scrambling to find a buyer.

The Sunday Times can reveal that:

  • There were six registered bidders at the auction, but only Appelbaum and a Gideon Leygonie confirmed that they had bid;
  • Documents signed on the morning of the auction, in Stellenbosch, reveal that Leygonie was bidding on behalf of Israeli businessman Ariel Gerbi. Gerbi is a co-developer of plush Cape Town Atlantic seaboard residential apartments.
  • Appelbaum questioned if Leygonie and Gerbi were properly registered and said a rival bidder was not visible on video footage of the auction; and,
  • Gerbi, who declined to comment, authorised Leygonie to bid up to R50-million for the estate.

The bidding initially started with an offer of R30-million and the price jumped to R60-million. Appelbaum declined to offer R65-million and Levitt then announced the R60-million bid was "a mistake".

The estate was knocked down to Appelbaum for R55-million. But a week later, after Appelbaum demanded details of the other bidders, the liquidators declined to confirm the sale.

Levitt said on Friday Leygonie had erred when he bid R60-million and then retracted it.

The registered bidders were: Appelbaum, Cawood, Steyn, Basson, Douglas de Jager (ex-Remgro non-executive director) and Leygonie.

Appelbaum said yesterday: "We had initially intended participating in a legitimate auction on December 10 - not bidding against ourselves and then entering into negotiations with the auctioneers.

"Auction Alliance has, to date, not produced a genuine underbidder [the rival who bid against Appelbaum] despite our many requests and has refused to furnish us with unedited and untampered videos of the auction and other documents."

She says the dispute was not over "price or value but this apparently unlawful and unconscionable conduct left us with little option but to report their conduct to the relevant authorities, which we have now done".

Levitt categorically denied any attempt to stitch her up, saying: "This auction was 100% legitimate. There have been no legal demands from her and, since her bid was not confirmed, she has no claims against us.

"The reason why I am so annoyed [about the allegations] is that I've been advocating for new regulations and, although our auction was completely compliant, we have now been accused and defamed of conducting a sale under murky circumstances."

He said many clients did not like to bid publicly at high-profile auctions " because they don't want to get embroiled in media and they don't want people to identify who they are".

"We often have people bidding on behalf of others and Auction Alliance is asked to arrange someone - a proxy bidder - to bid on their behalf. That's the case here. And that is where Wendy patently misunderstood who she was bidding against."

Leygonie has served in this capacity for Auction Alliance and has previously listed them as his employer.

Levitt said client confidentiality barred him from identifying the rival bidder.

And, despite numerous requests, neither SARS nor the liquidators would say who has paid for the upkeep of the farm over the past seven months, or if the estate will be auctioned again. Levitt said the estate was independently valued at R120-million.

This week the Sunday Times established that some key staff have been retrenched, vineyards at one of the estate farms are not being maintained, and the estate wine is being sold off at fire sale prices.

A "closed for function" sign barred the estate's Agulhas farm.

Investment research company Intellidex named Appelbaum as SA's richest woman in 2011. She is said to be worth R1.99-billion.

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