Pam Golding is under intense scrutiny
The multi-pronged probe followed reports that the more than R18billion-a-year group allegedly facilitated the sale of properties to the children of former Mozambican president Armando Guebuza, without following legal requirements and allegedly aided money laundering.
The two properties in Dainfern and Kyalami Estate, north of Johannesburg, are said to be worth a combined R50million.
The EAAB will jointly probe with the Financial Intelligence Centre (FIC), the allegations published in a Mail and Guardian report.
Pam Golding Properties’ general manager: real estate operations, Bradd Bendall, said yesterday: “We take these allegations extremely seriously and have commissioned a full and independent external investigation.” He said the group’s own investigation was well under way, but that he was not in a position to comment further at this stage.
“Furthermore, we have not been notified by either the EAAB or FIC of any investigation to be carried out by them, but we will co-operate fully,” he said.
South Africa’s regulations require real estate companies to identify the origin of funds used to purchase properties, and conduct extensive due diligence on politically exposed persons.
The Mail and Guardian reported that Pam Golding allegedly received illegal funds in their trust account on behalf of Mozambique’s then president Guebuza’s son.
The funds were sent through Privin- vest, a Lebanon-based shipbuilding company that was identified by US prosecutors as part of a probe into Mozambique’s $2bn (R31.3bn) bond that was alleged to have indebted Mozambicans and defrauded investors.
Privinvest allegedly also served as a primary conduit for the payment of bribes to high-level Mozambican officials, including the former finance minister Manuel Chang.
Unlike more sophisticated money laundering schemes, the properties owned by Guebuza’s children - Armando Guebuza and Valentina Guebuza - were listed under their own names.
“Pam Golding should certainly have known that the vast sum of the Guebuza children’s property sale, and the use of a third party warranted an investigation,” the report noted.
EAAB chief executive Mamodupi Mohlala said the allegations were of a serious nature, and senior officials from the regulator would lead the investigation.
“We have to ensure there is full compliance, no matter how big or small a licensee. We demand full compliance in the interests of consumer and public protection,” Mohlala said.
The EAAB, as the supervisory board of the property industry, is set to meet with the FIC in the coming days to finalise the scope of the investigation.
Mohlala said the investigation would involve officials doing on-site inspections at Pam Golding Properties’ premises, and requesting access to documents.
Any adverse findings would result in the agency being hauled before an EAAB disciplinary hearing. The final findings would determine a possible sanction, which could include a substantial fine.
“We will expedite the investigation and request co-operation from all parties. The allegations against Pam Golding’s conduct is most concerning. We are aware that the property sector, more especially the real estate sector, is a source of wealth creation.
“We, however, say create wealth legally and according to the rules and policies. No one is above the law.”
The investigation would probe whether Pam Golding Properties transgressed sections of the FIC Act, such as section 21B, which requires determining the identity of a client; section 27A into money laundering and terrorist financial control regulations; and section 28 into cash threshold.
Other sections include section 29 relating to suspicious and unusual transactions; section 31 into cross-border electronic transfers; and section 42A which requires a company and its employees to ensure compliance with a risk management and compliance programme.
The EAAB has, according to reports, imposed relatively lenient fines on its members for various transgressions, such as R25000, but Pam Golding directors might also have their fidelity fund certificates revoked for up to three years. The certificates allow them to sell property.