Auction Alliance board members might face investigation

The members of the board of embattled Auction Alliance (AA) may face a criminal investigation if former CEO, Rael Levitt, does not honour a summons issued by the National Consumer Commission (NCC).

This is according to the Consumer Commissioner, Mamodupi Mohlala.

However Levitt’s lawyer Dale Smiedt, of Smiedt & Associates, has indicated that an application to have the summons entirely “set aside” will be heard in the Cape High Court on Thursday.
Smeidt declined to comment on the substance of the objections to the summons, or on the possibility that either Levitt or AA’s board members may face criminal charges, saying that it would be “inappropriate” given that appeal hearings are to be held.

Noting a concern that Levitt is apparently out of the country, perhaps in Israel, Mohala said that AA’s board members may be held to account for the actions of Levitt and AA should Levitt not return in time for hearings scheduled for May 4.

“Auction Alliance has a board of directors which has a fiduciary duty to consumers to make sure … (the firm is) not in contravention of the Consumer Protection Act (CPA) …

“As such, if Levitt does not come himself, we will have to look for recourse for the consumer against the other directors of the institution,” she said.

While Levitt and AA have already been found guilty of contravening the CPA through the NCC’s civil investigation, the commission has an obligation to refer any suspicions of criminal activity to the National Prosecuting Authority (NPA) and the police for potential criminal investigations.
“Initially the approach was that we would only refer that investigation in relation to the conduct of Rael Levitt himself but we are now extending it to say other directors have a fiduciary duty not only in a civil context but in a criminal context to make sure that they don’t act in a manner that would be detrimental to consumers,” said Mohala.

“If you are a director effectively executing your responsibilities and managing an institution … you need to satisfy yourself that the proper processes and systems are in place to ensure proper legal compliance,” she said.

Mohala had indicated that the NCC would be issuing summons for AA’s acting CEO Bruce Sneddon and chairperson, Sango Ntsaluba, to attend hearings. It is unclear when these summons would be served.

A summons was re-issued on Levitt’s residence on Friday April 14 giving him 14 workings days, or until May 4 at 10am, to present himself to the commission.

The summons was initially issued to Levitt’s attorneys after they requested that all correspondence with their client be made through them regarding the Quoin Rock Estate auction matter, said Mohlala.

It was subsequently served on Levitt’s private property. The call to require the summons to be re-issued on Levitt personally was “a strategic tactic” adopted by Levitt’s lawyer as he was allegedly out of the country and thus unable to attend hearings, said Mohala.

“The last we heard was that he is out of the country in Israel,” said Mohala. “Official communication is that he is in Israel and he was supposed to return on April 2.”

Author: Michael Rees

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