31 May 2011 The EAAB Rejects the unfounded allegations made by Wendy Machanik with the contempt it deserves

31 MAY 2011

While it was not the initial intention of the Estate Agency Affairs Board (“the EAAB”) publicly to comment on the unfounded and unsubstantiated allegations raised by Ms. Machanik at the Commercial Crimes Court hearing on 30 May 2011, the fact that these allegations have now been placed in the public domain by Ms. Machanik leaves the EAAB with no alternative but fully to deal therewith.

The facts, and the EAAB’s audited financial statements in respect of both itself and the Estate Agents Fidelity Fund (“the EAFF”) for the periods 2005/6; 2006/07; 2007/08; 2008/09 and 2009/10, unambiguously show that any allegations suggesting the unauthorised use by the EAAB of EAFF moneys are not only completely devoid of substance but also baseless.  There is neither merit nor truth to the averments attributed to the former chief executive officer of the EAAB that the EAAB was either ‘bankrupt’ or using moneys from the EAFF without authorisation. Such averments are nothing more than arrant nonsense. 

Any such activity would have raised an exception in the audit of both the EAAB and the EAFF.  The audited financial statements contain no such qualification and, indeed, show that the EAAB had surplus cash over all the financial years concerned after paying its own expenses.

At no time have the funds of EAFF been used for purposes other than those that are prescribed by the Estate Agency Affairs Act (“the Act”) or to fund the expenses of the Board.  Had the averments contained even an iota of substance neither the EAAB nor the EAFF would have received unqualified audit reports.

The EAAB is mandated by the Act to control and manage the EAFF.  The Act, furthermore, permits the EAAB to pay from the EAFF, whenever it is required, the expense involved in the control of the fund, including remuneration and allowances to members of the Board in connection with the management of the fund.

The Board, in giving effect to the provisions of the Act, has authorised, as the Act permits, the payment of an administration fee, which changes from time to time as circumstances warrant, from the EAFF to the EAAB.  The administration fee is, furthermore, fully dealt with and properly accounted for in the audited financial statements of both the EAAB and the EAFF.

It is also to be underscored that the Act gives the EAAB a full discretion on whether or not to pay, out of the EAFF, interest on any claim that has been admitted against the EAFF. Claims committees of the EAAB consider such claims and make suitable recommendations on their payment or otherwise to the Board.  Such recommendations include the question of whether or not the Board should, in the exercise of its statutory discretion, pay interest to claimants.


For all media enquiries:

Ms Portia Mofikoe                                                                   
Executive Manager: Marketing, Stakeholder Relations and Education                                   
Estate Agency Affairs Board                                                   
083 4490 883 or 083 993 6120
Tel: 011 731 5662 or Portia.mofikoe@eaab.org.za

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