Heads have begun to roll as Nedbank and Absa launch their own investigations into staff who may have been on the take from Auction Alliance.
Investec and FNB made similar moves earlier this week as the fallout spread from revelations that some bank staff had been paid hefty commissions to put business the way of the auction house founded by Rael Levitt.
Throughout Wednesday afternoon, Nedbank forensic officials interrogated John Wallander, who had been contracted to one of the bank’s corporate property finance outlets in Cape Town, and who is named in a paper trail as one of a number of bank staff who were paid by the nationwide auction house.
Wallander’s contract ended on Wednesday, while a second Nedbank employee is being investigated in Joburg.
Absa also started an internal probe Wednesday afternoon on the basis of evidence presented to the bank regarding David Traub, who headed the bank’s recovery division in Joburg until 2003.
The division is responsible for selling off the bank’s distressed assets, many of which end up under the hammer.
“Based on the information shared with us today, I can tell you that an investigation has now begun,” Louis von Zeuner, the bank’s deputy group chief executive, told the Cape Times.
“We stand for a particular ethic and no one is going to stand in the way of us living up to exactly that.”
Both banks have ceased trading with Auction Alliance while their respective probes take their course.
“During the course of the day, our interrogations have progressed to such a stage that we have informed AA that we will not refer any new cases to them until we have concluded our investigation,” Philip Wessels, Nedbank’s head of risk, said on Wednesday.
Auction Alliance and Levitt, until Monday the company’s chief executive, are also being investigated by the National Consumer Commission, the Estate Agency Affairs Board and the South African Institute of Auctioneers.
Late last month, Independent Newspapers blew the lid on operations within Auction Alliance, revealing how kickbacks were regularly paid to attorneys, liquidators and bank staff to push business the way of the company – payments that Levitt himself described as “money under the table” in one internal e-mail.
At the time, Levitt told Independent Newspapers that “Wallander was probably a vendor bidder” and categorically denied ever paying him for referring business his way.
Wallander worked for Fidelity Bank, which was taken over by Nedbank in 2000. He retired from the bank in 2010, but continued working on a contract basis until yesterday.
“But the termination of his contract and the timing of the investigation are coincidental,” Wessels insisted.
E-mails in the possession of Independent Newspapers show that, during the course of his employment, Wallander received commission for referring work to the auction house, the code words for which were “outside intros”.
The problem was how to disguise the payments “as the auditors don’t want it to say (cash)”, according to another e-mail, which then identifies Wallander and three other individuals as those whose names had to be disguised.
Though the internal auditing system was then manipulated to do just that, the name of Wallander and many others had already appeared on ledgers which are now in the possession of Independent Newspapers.
In the case of Traub, the payments were often quite large, in at least one instance in excess of R150 000. A separate e-mail, for another large payment, stated: “The money is for David Traub of Absa again. But must be a cash cheque.”
Just how much Traub may have pocketed is unclear.
“But it doesn’t matter whether it was R1 or more,” Von Zeuner argued. “We just won’t tolerate it.”
Traub could not be reached, while Wallander agreed to talk to the Cape Times, but then later declined to comment. - Cape Times