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Why the sudden haste EAAB?

MAIN IMAGE: Mamodupi Mohlala, CEO EAAB; Bradd Bendall, managing director: real estate operations, Pam Golding Properties.

On Sunday 1 March the EAAB announced they will approach the Financial Intelligence Centre (FIC) to do an investigation of Pam Golding Properties (PGP) who may or may not have been in breach of the FIC Act.

Such was the haste that the entire South Africa was informed of this intention before any communication was sent to PGP. Any estate agent dealing with the EAAB could only be astounded at the sudden perceived efficiency.

This does beg the question: What is behind the public speedy approach in respect of something that happened about six years ago?

Further reading: Mozambique: ‘Hidden Debts’ – Definitive accusation lists bribes paid by Privinvest

“I find this strange as Rebosa repeatedly had to ask the EAAB as the responsible body to educate/inform the industry prior to the enhanced FIC Act requirements taking effect on 1 April last year, yet they only started doing so after the fact,” says Jan le Roux, CE of Rebosa. “Nobody was in a hurry back then.”

Further reading: 1 April 2019 is deadline for FIC compliance

former Mozambique president Armando Guebuza.

It is alleged that PGP may not have acted in accordance to the law when properties in Gauteng were sold about six years ago to the children of former Mozambique president Armando Guebuza. (Image: Mail&Guardian)

It was reported in the media that properties in Gauteng were sold to two children of an ex-president of Mozambique and that PGP may not have acted in accordance with the law whilst processing the transaction. It should be noted that estate agents are supposed to report suspicious incidences/consumers in confidence to FIC, not to the EAAB – hence PGP may well have – the EAAB would not know.

The action announced by the EAAB was so swift that there apparently was no time to consider that the requirements in terms of the FIC legislation changed on the 1st of April 2019 and that the transaction in question took place years before when far lesser requirements existed. Possible transgressions now mentioned did not exist at the time.

“Only an investigation, properly done, can determine if PGP was at fault and to now raise the spectre that they may have been at fault in terms of the FIC requirements, that were not applicable at the time, borders on ludicrous,” adds Le Roux.

PGP’s general manager: real estate operations, Bradd Bendall, comments on the matter were that the company takes the allegations extremely seriously and have commissioned an independent external investigation. He also said PGP will cooperate fully with the investigation of the EAAB.

Mamodupi Mohlala, CEO of the EAAB, on Sunday 1 March said in a public statement: “Enforcement and compliance are at the core of our mandate as a regulator. We therefore have to ensure that there is full compliance no matter how big or small a licensee. We demand full compliance in the interests of consumer and public protection.”

No disputing that.

Question is though why the incredible diligence in respect of a big national company and what seems to be a total neglect as far as other disciplinary issues are concerned?

It is common cause that the EAAB is anything but effective in preventing thousands of agents operating illegally. According to Le Roux, Rebosa has been informed that more than 270 disciplinary hearings since 2018 have not taken place despite the fact that the complaints have been investigated and referred. “These are not cases of “alleged” misconduct but rather of investigated misconduct where consumers were put at risk through non-compliance. There can be no excuse for this omission nor justification for the current hasty actions,” he adds.

Mohlala subsequently announced this week that there will also be a widespread investigation to determine the extent of this “practice” in the real estate industry that might even have led to artificially inflated property prices.

Judging by recent statistics from FIC the real estate industry appears to have been very diligent in reporting ‘suspicious and unusual transactions’ to the FIC. During the period 1 April 2018 to 31 March 2019 the FIC received 5 409 reports from estate agents – this includes reports on all cash transactions over R25 000, section 29 reports (which refers to transactions that arouse suspicion in terms of money-laundering or terrorist activities) as well as terrorist reports.

Comments Le Roux: “The FIC serves a necessary purpose and any estate agent acting in defiance of this Act should be investigated and punished if necessary. However, trial by media and jumping to conclusions does not serve anyone well.”

“I so wish that all that was said by the EAAB was ‘We will ensure that this matter is brought to the attention of FIC and will do our utmost to ensure that a thorough investigation takes place and that guilty parties, if any, are punished in accordance with the law’.

“Thousands of agents are reporting diligently to FIC in terms of the Act and not even one agent has been found delinquent to date (as can be determined on the FIC portal),” continues Le Roux. “The hasty approach, numerous public statements while actual cases of misconduct and non-compliance are neglected makes one wonder … it generates publicity but does not serve the industry and thousands of compliant agents well.”

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