Two top banks have stopped trading with Auction Alliance until investigations of alleged corruption come to a close.
|||TWO of the country’s top banks have stopped trading with Auction Alliance (AA) until the investigations of alleged corruption at the nationwide company come to a close.
Investec and FNB have told the Cape Times that until such time as AA can clear its name, they will not be giving any business to what was until recently regarded as the South African leader in the auctions sector.
In recent weeks Independent Newspapers has revealed a string of wrongdoings on the part of Auction Alliance, an exposé that came on the heels of a complaint to the National Consumer Commission (NCC) by businesswoman Wendy Appelbaum.
The move prompted a number of public investigations into the company. Founder and CEO Rael Levitt stepped down on Monday as the probes got under way.
At the heart of the financial controversy are allegations that staff members in some of the country’s main banks have received hefty kickbacks from the auction house for liquidations or insolvency cases they referred its way. According to evidence in the possession of Independent Newspapers, AA has handed over to some bank staff up to half of its own commissions in exchange for a steady flow of business over a number of years.
“We have temporarily suspended giving work to Auction Alliance and we are now carefully reassessing our relationship with them,” Ciaran Whelan, the global head of risk at Investec, said yesterday.
Until now Investec has channelled most of its auction work to Levitt’s company.
“We did it because they provided a good service,” Whelan said. “But when a service provider does not uphold the same values as ourselves, we act.”
Last Saturday week, Independent Newspapers’ Saturday titles revealed how two of Investec’s Johannesburg-based staff members received the money from Auction Alliance over a number of years. One of the men in question was named on Sunday night in a television documentary.
However, the employee in question was not prepared to be interviewed by the Cape Times yesterday and according to Whelan, until the bosses have a clearer picture of the accusations, he will not be speaking in the name of the bank.
Though a staff member at Absa, whose identity is known to Independent Newspapers, has also been implicated in the kickback scandal, the bank opted for a “no comment” policy yesterday afternoon and leaned on an earlier statement which stated they will “provide full co-operation to get to the bottom” of any allegations that might come to light.
FNB was more forthcoming, however, and like Investec has suspended all trading with the Cape Town-based auction firm until the allegations are fully probed.
“We are taking this very seriously,” Michael Vacy-Lyle, the CEO of FNB Premium Business Banking, said yesterday. “Our forensic auditors are already investigating the matter.”
Ines du Preez, the former chief operating officer of FNB Commercial Bank yesterday acknowledged that he co-owned a game lodge with Levitt in North West at a time when he was referring auction work to Auction Alliance.
He insisted there was nothing untoward in the venture and that he never received any financial kickbacks from either Levitt or his company. “I had a 25 percent shareholding in the lodge,” Du Preez said. “And we co-owned it for about three-and-a-half years. And we sold it. And that was that.”
Vacy-Lyle said he could not comment on Du Preez’s personal assets or private business dealings. - Cape Times