The National Consumer Commission is expected to return a guilty verdict against Auction Alliance on Friday in the complaint brought by billionaire Wendy Appelbaum, a move that could set the company back at least R30 million.
The businesswoman alleges that she was the victim of a deliberately phony auction last December when a ghost bidder was introduced to wrongfully chase up her bids.
If the company is now found guilty of transgressing the Consumer Protection Act, it can expect to receive a hefty fine equivalent to 10 percent of the firm’s annual turnover.
Last year, Auction Alliance recorded a turnover of R300m based on assets sales to the tune of R6 billion, according to an affidavit signed in February by Rael Levitt, the founder and former CEO of the company.
However, commission staff were keen to point out last night that this morning’s verdict relates only to Auction Alliance and not to Levitt.
Though he penned a comprehensive response to Appelbaum’s complaint in writing, he has refused to be interrogated by the panel assembled by commissioner Mamodupi Mohlala when the hearings into the complaint began a fortnight ago, and has ducked the three summons issued by her.
Peter Moyo, the chairman of Vodacom as well as the CEO of Amabubesi, the black economic empowerment partner of Auction Alliance, told the Cape Times Levitt is in Israel and will not return until the beginning of April.
Smiedt & Associates, the law firm acting on behalf of Levitt, wrote to Mohlala last week to advise her that “Levitt is of the Jewish faith” and that the proposed dates for his appearance fell “shortly before the commencement of the Jewish Sabbath, which we regard as wholly inappropriate”.
Yet the auction that started the dispute was held on December 10, a Saturday and holy day in the Jewish calendar.
As chairman of Auction Alliance, Sango Ntsaluba, a chartered accountant who heads Amabubesi, was also requested to appear before Mohlala, as was Bruce Sneddon, the man who stepped into Levitt’s shoes when he stepped down in February in the wake of a money-making racket exposed by Independent Newspapers.
When they were not prepared to make an appearance, she decided to deliver a verdict in their absence, believing she had “given everyone the opportunity to have their side of this story heard”.
The Cape Times also understands that the allegations concerning possible wrongdoing on Levitt’s part will now be handed over to the National Prosecuting Authority and the commercial crimes unit of the SAPS to deal with as they see fit.
In the past fortnight, Mohlala has interviewed the ghost bidder in question, Deon Leygonie, as well as the three liquidators involved in the sale.
Each of them has implicated Levitt in wrongdoing.
Leygonie has admitted he was paid by Levitt to bid on December 10, though he claims he was bidding on behalf of proxy bidder Ariel Gerbi, who was unknown to him at the time.
For their part, the liquidators have said Levitt is not reflecting the truth when he claims that a reserve price was attached to the Quoin Rock wine farm, the property in question, leaving Levitt with a case to answer.