The embattled Estate Agency Affairs Board (EAAB) has been placed under administration, Human Settlements Minister Tokyo Sexwale said on Tuesday.
The embattled Estate Agency Affairs Board (EAAB) has been placed under administration and Human Settlements Minister Tokyo Sexwale has called for the Special Investigating Unit to probe wrongdoing in the affairs of the EAAB and to lay criminal charges if necessary.
“I am compelled in the interests of bringing certainty and order to put [the board] under administration,” Sexwale said in Johannesburg.
The decision came into effect on Monday.
He called for the Special Investigating Unit to probe wrongdoing in the affairs of the EAAB and to lay criminal charges if necessary.
“I've also decided the Special Investigating Unit must step in and must bring in a very strong broom to clean up this mess.”
At the same time, his department would conduct due diligence into the EAAB to understand what they are inheriting, he said.
Sexwale was addressing estate agents, after his department took over the EAAB in May.
This regulatory body for the real estate industry previously fell under the authority of the department of trade and industry.
“You are spoiling the industry, you are making headlines for all the wrong reasons,” Sexwale told them.
An administrator would be appointed within days.
Speaking to media after his address, Sexwale said he had been aware of problems at the EAAB including alleged corruption, abuse of funds, maladministration and embezzlement.
However, he was forced into taking action when the board's chairwoman, Ina Wilken, resigned this month shortly after taking up the position.
He had met Wilken to find out why she had resigned and she told him - which he did not want to disclose - what the ‘tilting point’ was.
“She is dissatisfied about certain issues around governance,” said Sexwale.
The EAAB has had three acting chief executive officers since Nomonde Mapetla was suspended, before her contract ended early last year.
Before Wilken, acting chief executive officer Bryan Chaplog was removed by the board. The board said this was part of a rotation of the position.
Last year, chairman Thami Bolani was suspended by Trade and Industry Minister Rob Davies after allegations that a company of which Bolani was chairman pocketed R200k from the EAAB.
Sexwale on Tuesday dissolved the board, saying it was dysfunctional.
“To date when a board is supposed to be having 15 members, they are left with three.”
Sexwale said he was particularly interested in hearing from the EAAB's suspended company secretary Nkululeko Ndebele.
He also raised concerns about Wendy Machanik, Auction Alliance and the board's fidelity fund.
“People must gain assurances that the fund is properly used... in the interests of the sector,” he said.
Machanik, the close corporation Wendy Machanik Property Holdings, and its chief financial officer Bruce Bernstein have been charged with conspiracy to commit fraud, among other things.
Businesswoman Wendy Appelbaum alleged that Auction Alliance had used a ghost bidder when she bought Cape winelands estate, Quoin Rock, for R55 million in December last year.
Sexwale said he hoped the board issues would be dealt with quickly to ensure investor confidence, as it was a sector ‘very critical to the economy’.
“It's important that we bring certainty back as quickly as possible.”
Sexwale will hold a summit with estate agents in September.
He called on anyone with knowledge of what was going on at the EAAB to inform his department.
Seeff says they hope that this intervention will include a turnaround strategy that would revamp the EAAB in terms of a clear mandate, leadership structure (from the Chairman to the CEO, board and operational staff), and importantly service delivery to the industry and public.
Meanwhile, the decision by the Human Settlements Minister, Tokyo Sexwale to overhaul the EAAB is welcome news for the industry and public, says Seeff Chairman, Samuel Seeff.
He says the industry touches every citizen and a strong, effective and efficient governing body is critical to the stability of the industry.
Leadership changes, lack of service delivery and of purpose and direction are just some of the issues that have plagued the board, he says.
As a stakeholder, we along with other industry professionals are delighted with this intervention and are committed to working with REBOSA to finding solutions for our industry including a strong functioning EAAB, says Seeff.
Seeff says they hope that this intervention will include a turnaround strategy that would revamp the EAAB in terms of a clear mandate, leadership structure (from the Chairman to the CEO, board and operational staff), and importantly service delivery to the industry and public.
This should also be communicated to the industry and public so that there is clarity on the way forward.
Priorities that they would like to see include:
1. Skilled and experienced executive leadership and board supported by suitably experienced and qualified government officials. Industry stakeholders (estate agents, brokers, bankers, attorneys and conveyancers) should play a fundamental role.
2. A clear and decisive mandate, including:
- the issue and control of fidelity fund certificates
- competency of individuals to practise and dealing effectively with non-compliant operators
- certification - from examination through to practical experience, learnerships, bursaries, etc. Does this fall within the ambit of the board or does this rest solely with the Services SETA?
- protecting the public interest in dealing with the industry and acting as a link with the public, industry and government
- clarity on what legislation governs the industry. For example, in terms of the new companies act small businesses no longer need audited financials, yet a new EAAB directive requires this.
It makes no sense for an industry with many small operators for whom it is onerous and expensive; it may be necessary, but conflicts with the companies act
- clarity on the Property Transformation Charter – it is not a legislative requirement, yet there is the threat of withholding of fidelity fund certificates if you do not meet the requirements
3. A closer working relationship with REBOSA and engaging effectively with the industry.
4. An efficient call centre and an effective clearing system for the timeous issue of fidelity fund certificates.
5. A legal and control team who, when advised of malpractice can take decisive action.
“We see an opportunity here for the minister to reposition the board with the right people and a clear mandate that can bring about clarity and stability and send the right message to the industry and the public,” he adds. – Sapa and Seeff Properties
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