CEO of Auction Alliance Rael Levitt. Picture: Cindy Waxa
CEO of Auction Alliance Rael Levitt. Picture: Cindy Waxa

Hammer falls on auction boss

By Noni Mokati Time of article published Mar 31, 2012

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The hammer has fallen on embattled Auction Alliance founder Rael Levitt, who could face a year in prison or a R1 million fine.

The National Consumer Commission (NCC) yesterday laid bare its findings on allegations of bid rigging and fraud against Levitt and his company Auction Alliance.

Weekend Argus blew the scandal open in February, revealing allegations that Auction Alliance had paid liquidators, attorneys and bank staff to send them business.


The judgment by the commission emanates from a specific complaint lodged in January by influential businesswoman Wendy Appelbaum, who said she was “duped” in a mock auction in December.

Yesterday a satisfied Appelbaum said: “This is much bigger than me. I dealt with three months of aggravation. It’s important that justice is done in this country. It’s quite difficult to challenge these discrepancies but I think this is a good judgment.”

The owner of DeMorgezon wine estate said Levitt had bullied her when all she was trying to do was to protect her rights.

“He brought a lawsuit of defamation against me. But it’s time that people sit up and take notice of organisations such as the NCC. They are here to help.”

Appelbaum was an active participant on the day of the auction, held last December in Stellenbosch by Levitt and Auction Alliance. On sale was the liquidated Quoin Rock Winery and Manor Estate.

The 194ha property, which belonged to SA tycoon David King, was attached by Sars in July following King’s alleged R2.8 billion tax bill.

At the auction, Appelbaum was the highest bidder for the estate, which was knocked down to her by Levitt for R55m, shortly after she declined to place a bid beyond R60m. But after the sale, Appelbaum claimed she discovered that she had been the only “genuine” bidder, adding that the auction process failed to comply with the Consumer Protection Act (CPA).

In its judgment, the NCC upheld Appelbaum’s grievances, saying it found Levitt had used “ghost bidder” Gideon Leygonie to bid against Appelbaum, so contravening section 45 of the CPA. The commission also said it found several glaring omissions and factual inaccuracies in Levitt’s defence documents.

These included a statement in which Levitt alleged that he assumed that Auction Alliance had recruited Leygonie as a vendor bidder. But in his testimony Leygonie contradicted Levitt’s account, saying the Auction Alliance founder had in fact instructed him to bid as a proxy on behalf of offshore buyer Ariel Gerbi 10 minutes before the auction.

It is believed that Leygonie filed a bid for R60m, which was later retracted by Levitt.


“We conclude that the evidence presented before the NCC, including Appelbaum’s complaint that Levitt conducted a mock auction… are both true and have been factually substantiated… This being the case, both Levitt and Auction Alliance are guilty of contravening the provisions of the CPA by conducting a mock auction with the intention to induce Appelbaum to participate in a flawed auction process…” NCC commissioner Mamodupi Mohlala said.

In its compliance notice, the commission would consequently order Auction Alliance to pay an administrative fine of 10 percent of its annual turnover. Previous newspaper reports suggested this could be about R30m.

She said other steps to be undertaken by the commission included consulting Levitt on April 10 to establish whether his conduct indeed amounted to fraud.

Mohala said Levitt knowingly provided false information to the commission, which could call for a fine of R 1 million and/or a period of imprisonment up to 12 months.

Mohlala also revealed that the commission had received a new complaint about Auction Alliance involving claims by three banks.

Meanwhile, Auction Alliance said it had considered the statement issued by the NCC, and had instructed its legal team to review the decision. - Saturday Argus

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