Sunday, February 6, 2011

Crackdown on rogue estate agents

Crackdown on rogue estate agents
Feb 5, 2011 11:40 PM | By WERNER SWART


Minister warns of tough action as two more top companies are probed in upmarket scandals

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Estate agents who "cut corners" will face the might of the law. This is the warning from Minister of Trade and Industry Rob Davies in the wake of two new scandals engulfing national property giant Seeff Properties and Durban-based tycoon Keith Wakefield.

It comes weeks after the Wendy Machanik trust debacle broke.

The minister has tasked the Estate Agency Affairs Board with ridding the industry of bad apples following a meeting on Thursday.

The board is in the process of launching investigations into both Wakefields and Seeff.

Seeff Properties is at the centre of a fractional title scheme scandal that has left scores of investors in debt after the luxury properties sold to them were allegedly irregularly bonded to the tune of R50-million.

Another probe involves property mogul Keith Wakefield, following his involvement in a company behind a multimillion-rand golf estate development which was provisionally liquidated this week.

While Seeff maintains it's not liable for the debt, as it severed ties with a business partner who managed the fractional scheme, investors are not convinced.

Some, including internationally renowned cardio-thoracic surgeon Dr Susan Vosloo, claim investors were duped into buying into the scheme, which they believed were Seeff properties.

Seeff chairman Samuel Seeff and former partner Henri Greyling are blaming each other for the confusion surrounding the Seeff Golf and Leisure Joint Ownership scheme.

The Sunday Times understands close to 450 shareholders are affected, with a shortfall of debt against remaining assets to the tune of around R30-million.

The scheme involved the "fracturing" of 32 luxury villas at Arabella in Hermanus, Zimbali estate and Sanlameer in KwaZulu-Natal, and Sparrebosch in Knysna.

Now Vosloo, who bought shares for eight weeks a year at Arabella - costing her just under R1-million for the five-bedroom, five-bathroom villa - is demanding answers.

She bought after receiving a Seeff newsletter in August 2007 promoting the scheme.

She provided the Sunday Times with a copy of the 2007 Seeff brochure as proof that she only bought because of the company's involvement.

An e-mail she sent to Seeff in December reads: "This illustrates clearly how Seeff Properties was associated with the project ... under no circumstances would a venture have been entered into that was with any organisation without the track record, reputation and integrity of Seeff."

Vosloo said she was horrified to discover recently that a bond existed against her property - registered in the company name Blue Beacon Investments 159 Pty Ltd - and the house was put up as surety for a massive R20-million loan taken out seven months after her purchase.

She also found that while shares in the house were sold to her in August 2007, the transfer of the property to the company was only done in March the following year.

"This is fraud. You can't sell something to someone when it doesn't belong to you. They made me pay a transfer duty of 8% on a property that didn't belong to them."

She scoffed at Seeff's explanation that they were initially unaware of the mismanagement, saying: "They are 100% accountable and equally responsible."

Samuel Seeff said the project came about in 2003, but he and Manning sold their shares to Greyling and resigned as directors in 2007 "after some differences". But Greyling retained the licence and continued to market the scheme using the Seeff brand.

Seeff said it was brought to their attention in November last year that there were bonds on the properties.

"When this was alerted to us, there were allegations that the situation was not contained to that particular villa, but more widespread ... we conducted an investigation and concluded that of 32 properties that were fractionalised, 18 had bonds and 14 didn't."

Seeff has enlisted forensic auditors from KPMG to conduct an investigation.

He admitted that "there are lessons to be learnt. We should have been far more demanding (in checking on company financials), and maybe we would have realised there were difficulties a lot earlier."

But Greyling hit back, saying he had been ruined by Seeff.

"I can't even buy milk for my family," he said.

He called on Seeff to "pay back the R10-million you have made from this project".

He said he had lost R15-million and said of Seeff's denials: "If they are so shocked, if they are so devastated and unaware of these deals, why did they sign sureties for the project. I was told they would not rest until I'm in jail, but I have a surprise for them ... they will sit right next to me."

EAAB chairman Thami Bolani said a special meeting had been called for this week where a strategy in dealing with the improprieties would be discussed. - Additional reporting by Monica Laganparsad

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