IEASA National - News

Estate agency board in turmoil   Article Date :10 Oct 2005 Allegations of financial irregularities at EAAB. Pretoria - The Estate Agency Affairs Board (EAAB), the statutory consumer protection body for the real estate industry, is in turmoil amid allegations of financial irregularities. Five members of the EAAB board have resigned following the completion of a forensic audit into its affairs. Astrid Ludin, the deputy director-general for consumer and corporate regulation at the department of trade and industry, confirmed yesterday that a forensic audit report had been initiated by the board of the EAAB and the report mentioned individual board members and irregularities by individuals. The report was submitted to trade and industry minister Mandisi Mpahlwa, who considered it before convening a meeting with the EAAB board. "As a result of the process, some board members have resigned voluntarily. Not all of them are mentioned in the report but to my knowledge five board members have resigned," Ludin said. She declined to name the board members who had resigned. "The matter is now under consideration by the minister at the moment, who will be issuing a statement on the matter once he has applied his mind." Speculation has been rife in property circles that the EAAB board resignations included chairman Linda Nyembe, deputy chairman Valencia Mazibuko and that several board members had resigned in protest. The alleged irregularities apparently relate to the redecorating of the EAAB's offices, false claims for training that was not provided, false expense claims, irregular promotions and "jobs for pals". Attempts to obtain comment from the EAAB were unsuccessful. Bill Rawson, the president of the Institute of Estate Agents of SA (IESA), said yesterday that the IESA had not been officially informed of any resignations by EAAB board members, but confirmed the rumours. Rawson said the forensic audit of the EAAB by auditing firm KPMG was initiated in February this year. The previous financial accounts of the EAAB were qualified "which is indicative that something is wrong". He said the EAAB's board, which was supposed to hold monthly meetings, had not held a meeting since April this year, raising questions about many of its operations. The EAAB was responsible for appointing the committees to hear disciplinary hearings and the IESA was unsure about the process now being followed or who was appointing the members of these committees. Rawson said it was disconcerting for estate agents that the regulatory processes of the EAAB were not functioning properly, particularly as estate agents had to start renewing their fidelity fund certificates this month. Estate agents are not legally allowed to operate or receive any commission if they are not registered with the EAAB and do not hold a valid fidelity fund certificate. "The implications of this are huge," said Rawson. "How can a regulator hammer agents for irregularities when they themselves are at fault. "It smacks of double standards. Maybe it is time to review the whole structure of the EAAB." CLICK HERE TO RETURN TO THE MAIN NEWS PAGE