Task force pounces on Auction Alliance

08 August 2012 - 02:19

A team of law-enforcement agencies yesterday raided 13 offices of the embattled Auction Alliance countrywide.

The raids were made as Auction Alliance faces numerous battles, including allegations that it duped wealthy property bidders.

Auction Alliance also faces complaints about bogus bids, which until last month were being investigated by the National Consumer Commission.

A separate complaint is being investigated by the Estate Agency Affairs Board.

The company's offices in Gauteng, KwaZulu-Natal, Eastern Cape, the Free State and Western Cape were raided.

Police spokesman Captain Dennis Adriao confirmed the raids but did not give details.

"The offices that were raided include five around Gauteng, five in Western Cape, one in Port Elizabeth, one in Bloemfontein and one in KwaZulu-Natal.

"They were conducted by an anti-corruption unit which comprised the Hawks, the SA Revenue Service, the Treasury, the Special Investigating Unit and the National Prosecuting Authority," Adriao said.

"We cannot provide further details on the raids as they are part of ongoing investigations."

Ian Small-Smith, Auction Alliance's lawyer, said he had not been told why the offices were raided.

"The state has provided us with certain documents which, on a prima facie basis, have been issued unlawfully and unconstitutionally and in flagrant violation of our clients' rights.

"In the circumstances we are considering the various remedies available to our clients and will put the necessary action in place.

"If they had asked us for any information, we would have gladly handed it over," Small-Smith said.

Auction Alliance's woes started in December when its former CEO, Rael Levitt, conducted a R55-million auction of a Cape winelands estate, Quoin Rock.

The lot went to billionaire Wendy Appelbaum.

Auction Alliance was alleged to have used a ghost bidder.

The company's record-keeping and financial affairs might reveal violations of the National Consumer Act, of the Estate Agency Affairs Board's rules and of the Financial Intelligence Centre Act.

Appelbaum complained that the sale, which was eventually aborted, was not legitimate after she found out that she was the only genuine bidder.

After the commission had ruled that Auction Alliance was guilty of misconduct in relation to the R55-million sale of the wine estate last month, the National Consumer Tribunal overturned the initial ruling and said the reasons for its decision would be made public "in due course".

The bidding scandal broke in December. Auction Alliance board chairman Sango Ntsaluba established an "independent investigation" in February amid mounting pressure relating to complaints against Levitt.

Levitt stepped down as CEO days later but reportedly said his resignation should not be perceived to be an admission of guilt as the allegations against him mounted. - Additional reporting by Nashira Davids