Minister wants action on allegations against EAAB CEO

Minister wants action on allegations against EAAB CEO

MAIN IMAGE: No stranger to controversy, Mamodupi Mohlala-Mulaudzi, CEO of the EAAB. Photo by: Cebile Ntuli

The Department of Human Settlements (DHS) minister Lindiwe Sisulu has asked the chairman of the Estate Agency Affairs Board (EAAB) for an action plan after he seemingly failed to react to serious allegations of irregularities and mismanagement at the industry’s regulator that implicate their new CEO.

Nepotism with executive appointments. Irregular and wasteful expenditure amounting to millions. These are among the serious allegations levelled against the EAAB’s CEO Mamodupi Mohlala-Mulaudzi. Senior staff members are deeply concerned that should this continue it will bring the real estate regulator to ruin within the next few months.

A memorandum detailing these allegations of mismanagement and irregularities that implicate the CEO was given to the EAAB’s chairman Nkosinathi Biko on 16 September, but he apparently failed to act timeously to launch an investigation into the claims. Simultaneously a copy of the memorandum was also sent to the Director-General of the Department of Human Settlements – the government department that the EAAB answers to.

Last week DHS Minister Sisulu in a letter to Biko gave him seven working days until today (Thursday 14 November) to respond with an action plan. In the letter the Minister informs Biko that she was advised by her department about “allegations of irregularities and mismanagement that have occurred and are currently occurring at the EAAB,” and that the allegations implicate the EAAB’s CEO. Mohlala has been CEO of the EAAB since the beginning of 2019.

Related reading: FFC backlog cleared says new EAAB CEO

The Minister goes on to quote from the Public Finance Management Act with reference to the responsibility of the accounting authority of a public entity to prevent ‘irregular, wasteful and fruitless expenditure with regards to operations and capital expenditure resulting from criminal conduct, and expenditure not complying with the operational policies of the council etc’.

She continues that financial misconduct is ground for dismissal or suspension and ends the letter with an ultimatum of seven working days for Biko to respond with a plan of action.

Tuso Zibula, DHS media relations, confirmed on Wednesday 13 November that the minister wrote to the Board of the EAAB with a request for a plan of action on how the concerns raised by an employee of the organisation are being attended to. “The concerns relate to the alleged mismanagement and irregularities within the organisation,” he says.

Not chairman but CEO responds

The EAAB spokesperson Bongani Mlangeni was asked to request comment from Biko on what is being done about the allegations and the letter from the Minister. Yesterday afternoon, in a call from the CEO’s office, a telephonic interview Thursday morning 14 November at 10am was requested in order to answer the questions directed at Biko.  This was surprising as the CEO had not been approached for comment. She was then forwarded to her direct email specific questions concerning the allegations made against her.

The CEO did not calI or respond to the email. Emailed comment was received around noon on Thursday from Biko that it would be inappropriate at this moment to “entertain” questions about the letter from the minister before the Board had submitted its own response to the Minister.

The whistleblower email

Earlier this week an anonymous email signed ‘Whistleblower’ informed the real estate industry asking industry members to call for the suspension of the CEO and for the immediate investigation of the allegations against her.  In this email mention is made that the CEO is responsible for irregular expenses and fruitless and wasteful expense at the EAAB. It is further alleged that the DHS minister stepped in because the EAAB chairman hasn’t done anything to investigate these allegations after he received information about it. Biko is allegedly protecting the CEO.

Another scandal for embattled EAAB

The latest allegations follow shortly after a Sunday Times report which said that Sisulu had instructed the director-general in her department to look into allegations of corruption and mismanagement at the regulator. The report also mentions that Biko confirmed the Board was looking into complaints of nepotism, fraud and theft at the institution which was raised by staff members in a memorandum presented to Biko in September.

In the last five years there has been a number of reports and calls for investigation on allegations of wasteful expenditure, mismanagement and irregularities at the regulator. The institution has gone through three CEOs and three CFOs in the last five years.

Related reading: Self-regulation could save property industry millions

Controversy appears to follow Mohlala wherever she goes. She fought and won two legal battles after first being fired as Director-General of the Department of Communication in 2010 and then in 2012 she contested her removal as National Consumer Commissioner.

In 2017 she announced that she will represent South African Football Association president Danny Jordaan when he was charged with rape. She is a qualified attorney with her own law firm.

Related reading: There are ten things we know about Danny Jordaan’s powerhouse lawyer

Despite just stepping into her new role as CEO of the EAAB, an entity facing enormous challenges ito effective financial, administrative and IT management, Mohlala in April was also appointed as deputy chairman of another embattled state-owned entity, the SABC. A few months later she is directly linked to a new controversy involving allegations against the CEO and chief financial officer of the public broadcaster’s new board.

Related reading:  SABC execs consider legal action as board document is leaked

Jan le Roux, CE of Rebosa commented “We request that urgent action will be taken to investigate. It is important that matters be put right if the allegations are true. The industry needs an effective regulator that leads by example. An undertaking from Mr Biko to take serious and immediate action would put minds at rest.”

In the weeks to come, all eyes in the real estate industry will be on EAAB chairman Biko and DHS minister Sisulu to see what plan of action will follow. Will the new CEO of the EAAB be suspended? If yes, indications are that she will not take this lying down.

Showing 14 comments
  • Johan Olwage
    Reply

    Just another one.

  • Mike Spencer
    Reply

    Just another corrupt, ineffective, inefficient government set up. The EAAB has been useless for years! The job of registering estate agents should be separated from that of protecting the public. The first could easily be handled in-house by the industry itself. This would over come the lack of vision about what the EAAB stood for. Currently it is simply a money making racket. What it offers estate agents that are registered is close to nothing and irrelevant. What it offers the public is worthless. Those that are not registered are not effected and don’t worry. The EAAB is a totally worthless exercise in futility.

  • david furness
    Reply

    Absolutely agree with Mike Spencer, instead of being an aid tot e industry and public they are a hindrance of the very worst kind. They bully the registered straight arrow agents and ignore the unregistered agents that still operate out there.

  • Andre Langeveldt
    Reply

    It will be a miracle if the EAAB or new board will be efficient and clean of corruption, as each and every other government related board or department have proven over the years that they can not keep their hands out of the cookie jar. With the industry already not having a great image out their its imperative we have a board that is 100% squeaky clean and ethical. I believe more than 50% of the board must be experienced and qualified agents/brokers to ensure our industry is properly represented and to have a proper system of checks and balances in place. Otherwise our R611 billion rands in the trust fund might very well not be there in a year or 2.

    • Pierre
      Reply

      Andre, R611 million.

  • Ian Badenhorst
    Reply

    Why stop them from bringing the EAAB to ruin. Let them at it and get it over.

    Self regulating in the industry is considered the most desirable and will be less expensive and better managed.
    Such as – NAMA for Community Scheme management firms and such activities, IEASA and also REBOSA should as a combined estate Agency professional Body take up the Challenge to prepare for a self regulated industry supported with a corporate central office within this group to provide the services of Professional indemnity insurance and Fidelity insurance for agents to protect the public consumer.

  • Michelle Lister
    Reply

    The EAAB has for years and I mean over 30 years been a useless entity. Always have had numerous battles within and in the industry. Why can this not be properly address by Senior broker owners with good reputations. All they do is collect funds and then waste them or even worse, they have their own built in corruption unit. It never seems to end….. waste of time, energy and funds.

    • Jonathan Kaoma
      Reply

      The institution has nothing to offer to its registered Estate Agencies and Estate Agents, the institution has been reduced to a mare collection entity of the hard earned money from the Estate Agencies and Estate Agents and get nothing in return by belonging to this institution.

  • Alun Solomon
    Reply

    I agree with Mike Spencer 100% I have been “disqualified” as an agent ( have been in the industry over 20 years ) by the EAAB ( who do they think they are anyway ) because i refuse to spend any more money on their stupid on line points system. Mmm, wander where everyone else’s money has gone.
    A regulator that should be a leading example has had soooo many CEO’s fired for some crime or another.

  • RALPH PANDOY
    Reply

    NOTHING NEW WITH THE INDUSTRY. ANOTHER TOOTHLESS DOG. MAKES ME WONDER WHY I WALK THE STRAIGHT LINE.

  • Winston
    Reply

    My biggest fear is that nothing will be done …which is par for the course in the ANC in general accross the board …has there been anything done to chase down the previous Staff members of the EAAB who are walking around unchallenged ….a lot of money has gone west,,, And no one is looking for the millions we paid out to them over the last 6 years…IT IS JUST ANOTHER ANC SCAM and Cyril has no chance of curbing the rot !
    I expected REBOSA to come out guns blazing but I don’t hear any gunshots !

  • caroline
    Reply

    Alun, I agree with you – where is the money going? . When they first brought in the R2000 to be paid for the online points system, the EAAB did not issue invoices – do they even now? I remember bringing it up at one of their Q & A forums in Kempton Park, (& I probably accused them of fraudulent practices, knowing me). I think & then the next year they did issue receipts. But without a correct financial audit trail, our money can just vanish.

  • Mandisa Sinuka
    Reply

    When are the appointments for the New Property Practitioners Act to be implemented?Its crucial that interviews are conducted so that processes are
    co-ordinated in an orderly fashion.The current board might not be in charge with the new entity and taking into consideration the new act and its legal implications it might be a futile exercise. Pls keep us updated with upcoming interviews for the new authority.

  • daniel christen
    Reply

    Incompetent, nepotism, corrupt, useless, ineffective, non-accountability, self-serving, unregulated, a complete farce,… these are some of the “terms of endearment” which are often used to describe the Ombud for the Estate Agency Industry.
    In my 14 years as an agent & principal, the EAAB, has proved itself to be a Toothless, Neutered Watchdog for the Industry! All bark, no bite and no balls to defend its agents, a sad sign of a regulatory body which creates the image of wanting to uplift the industry, ensure adherence to the Code of Conduct yet does not appear to have one of it’s own.
    The Act which defines it’s powers and abilities, as well as the regulation of agents, seems to be interpreted by the Board as a ‘magic cloak’ behind which to hide.
    Are the rules made to enforce or to confuse? There is so much bureaucracy, so many employees but no accountability, no apparent responsibilities until one is forced literally to communicate with the upper echelon of management and ultimately you are left high and dry as they don the magic cloak again?
    This is the start of a letter, no, a book to be completed

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