“Ghost bidding” not the norm

This according to the South African Institute of Auctioneers who also challenged Levitt to name any other auctioneer practising ghost bidding.

"Saia emphatically and categorically distances itself from Mr Levitt's assertion that ghost bidding is not unique to him, and is the norm within the South African auction industry and across the world," Saia chairman Tirhani Mabunda said on Wednesday.

"Saia also disputes Mr Levitt's statement that he has taken the brunt for the entire... industry."
A ghost bidder attends an auction with the intention of driving up prices.

Mabunda challenged Levitt to name any other auctioneer or auction company practising ghost bidding.

Mabunda was briefing reporters in Johannesburg in response to Levitt's comment in the Sunday Times newspaper on April 15, and because the allegations against him and Auction Alliance were "festering in the media".

Levitt told the Sunday Times in an e-mail he did not deserve to be demonised by South Africa.
"I was the country's most high profile auctioneer and I have taken the brunt for an entire industry," Levitt wrote.

"The public has focused on ghost bidding as if it was unique to me... ghost or vendor bidding happens across the globe from venerable art auctions in London, to real estate auctions in Sydney and cattle auctions in Texas."

His interview was the first since Auction Alliance was found guilty of contravening the Consumer Protection Act, during the auction of the Quoin Rock wine estate to billionaire Wendy Applebaum for R55 million.

Applebaum lodged a complaint with the National Consumer Commission (NCC) in December after she claimed that another bidder, Deon Leygonie, was acting on Levitt's behalf.
Mabunda said the public needed to know there was a difference between vendor or proxy bidding, and ghost bidding.

With vendor bidding, fellow bidders were aware that someone might bid on the seller's behalf to keep a reserve price (the minimum amount the seller will accept) on a bid.

With proxy bidding, bidders were made aware someone was representing a bidder not attending the auction. Both were legal, and commonly practised, Mabunda said.

With ghost bidders, fellow bidders were not aware of any proxy or vendor bids.

He said Saia welcomed the NCC ruling that the "deceitful retention" of Leygonie by Auction Alliance was fraudulent, because his role was not announced to other bidders.

However, Mabunda said the NCC's plan to ask the Estate Agency Affairs board to withdraw Auction Alliance's fidelity fund certificates (licences) would be "harsh" if the decision was based on the Quoin Rock auction alone.

He said there was no formal legislation regulating the industry, until the Consumer Protection Act came into effect last year. A more complete code for auctioneers was needed.

"More permanent solutions are required, and an industry code proposed by the NCC will serve such a purpose by prescribing minimum standards of qualification, licensing, ethics and professionalism for auctioneers," Mabunda said.

"Depending on the funding model, the industry code will either be enforced through an ombud scheme, or by the NCC."

He said Auction Alliance was no longer a member of Saia because it did not renew its membership. The institute would not comment on the threat of criminal charges against Levitt.
Earlier in April, the NCC threatened to have Levitt arrested if he failed to appear before them. He did not attend the last three hearings. The commission found him guilty of bid rigging and fraud and sentenced him to 12 months in jail or a R1 million fine.

An application for his arrest warrant was rejected by the Pretoria Magistrate's Court last Thursday.

NCC representative David Railo said the commission was struggling to find Levitt.
"He must avail himself on the fourth of May for a hearing. If he does not appear himself then we will take the necessary [steps] afforded by the law," he said.

Levitt told the Sunday Times he had "travelled extensively" to the United States and Israel over the past the few months.

"I needed a break after all the negative events in February and March and I will be back in South Africa soon," he said.

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