Constantia Sectional Title Management (CSTM) has been prevented from carrying on business following an order of the High Court in Johannesburg on Tuesday.
CSTM's fidelity fund certificate was withdrawn and its trust accounts placed under curatorship, by an order of the court under Acting Judge Gerald Farber.
In terms of the Estate Agency Affairs Act, a valid Fidelity Fund Certificate is required by estate agents and their directors before they can operate as an estate agent.
The order came after the Estate Agency Affairs Board (EAAB) sought an urgent interdict against CSTM and its former sole director Quintin Brown to stop them operating.
According to the court order, inspectors appointed by the EAAB found “serious irregularities in the affairs of Constantia management relating to the manner in which trust monies were dealt with and accounted for by Constantia”.
Neither CSTM nor Brown opposed the order.
The EAAB's lawyer Andrew Scarrot said there was an estimated shortfall of R18 million in the trust funds.
Lawrence Moepi, a chartered accountant with PricewaterhouseCoopers, has been appointed curator and would now have to establish how much money was allegedly missing.
In April, the same court granted a settlement order to the two parties following the EAAB's initial investigation.
The parties then agreed to resolve the “issues raised in the application, for the time being”, the settlement order read.
However, when Pasco Risk Management, appointed by the board, found further evidence of alleged mismanagement, the EAAB applied for Tuesday's interim order.
The EAAB also laid criminal charges against CSTM, and last Friday, May 20, the commercial branch of the SA Police Service raided CSTM's premises in Roodepoort.
“The investigation by the board is continuing and it appears also that the South African Police Service, in the form of their commercial branch, are also undertaking a criminal investigation,” the EAAB said in a statement.
CSTM administers 450 body corporates and receives close to 20,000 monthly payments. - Sapa