Auction Alliance to probe claims
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Claims of collusion between Auction Alliance, banks, liquidators, and attorneys in a money-making racket are to be investigated, the company said on Wednesday.
“The board considers the allegations against Auction Alliance and its CEO, Rael Levitt, to be of such a serious nature, that such a step is warranted,” Auction Alliance chairman Sango Ntsaluba said in a statement.
The company's board, which had commissioned the probe, would make no further statements until the investigation had been concluded.
The Saturday Star reported on February 18 that a 13-year old paper trail revealed the company had paid kickbacks to attorneys, liquidators, and bank staff to ensure business went their way.
The report claimed CEO and founder Rael Levitt said in e-mails the kickbacks would be paid in cash.
Sources claimed two staff members at bank Investec were paid large sums of money to ensure the company received preferential treatment. Kickbacks typically comprised half the company's earned commission.
These rose up to 75 percent during market slumps, to keep business alive, the newspaper reported.
The company reportedly trained auctioneers on how to rig an auction and told them what to do if they were caught.
On February 21, the Consumer Protection Commission (CPC) and the Estate Agency Affairs Board (EAAB) told The Star newspaper a probe into Levitt's business activities was underway.
Levitt has denied all the allegations, calling them “defamatory”. He said it was not uncommon for law firms to refer auctions to auctioneers and when they did, they could agree to give the attorney concerned a referral commission.
He offered to step down as a board member of the SA Institute of Auctioneers pending the outcomes of the CPC and EAAB investigations. - Sapa