Editorial: Biddingfarewell

The decision by Rael Levitt, the chief executive of Auction Alliance, a multibillion-rand empire, to step down is the latest twist in a strange story.

Levitt’s resignation follows revelations of bogus bidding and of kickbacks to financial institutions, liquidators and attorneys earlier this month.

The exposé, in Independent Newspapers’ Saturday titles, was based on interviews and a paper trail stretching over more than a decade. Levitt’s first response was an attempt to stop publication by applying for a court interdict. The articles were later published after an out-of-court settlement.

Auction Alliance has now appointed a forensic accountant to conduct an independent investigation and audit of the company’s affairs, while Levitt is also the subject of probes by National Consumer Commissioner Mamodupi Mohlala, by the Estate Agencies Board and by the South African Institute of Auctioneers.

Mohlala wants to investigate the circumstances surrounding the auction of the Quoin Rock wine estate, which was sold for R55 million last December. The sale was cancelled.

The outcome of all these investigations should throw light on practices not only within Auction Alliance, but also inside some of South Africa’s biggest and most respected financial institutions and legal firms. Evidence suggests that several liquidators, bank staff and attorneys pocketed hefty commissions from Auction Alliance as a reward for bringing the company business.

Banks that have done business with Auction Alliance are now distancing themselves from the company and conducting their own investigations into suggestions that some of their employees received irregular payments.

The National Prosecuting Authority should take a close interest in all this. For the moment the spotlight is on Levitt, but there are probably many others hiding in dark corners who deserve the NPA’s attention.