16 Feb 2011
CAPE TOWN - Some say if you throw a pebble in the oceans in Cape Town it can cause a tidal wave in South America - or something to that effect. Well it seems that the Wendy Machanik saga has caused more than a ripple in the local property industry and while it's not quite a tidal wave yet - that ripple is getting bigger.
A couple of frogs have been caught in that wave, leapfrogs to be exact. Following the Machanik revelations, Leapfrog Property Group decided, to its credit, to conduct an internal audit of 50 franchisees across the country. It uncovered some irregularities, and cancelled with immediate effect its agreement with the owner of two of its branches, one in de Waterkant and one in the City Bowl. The franchisees are suspected of misappropriating funds from their trust fund. Another Leapfrog franchisee has opened in de Waterkant and apparently its "business as usual". According to Leapfrog's Bruce Swain, after discovering the discrepancies in the Leapfrog franchisee, the company obtained power of attorney from the principal and have taken control of its bank accounts. The matter is currently being probed by Leapfrog, external auditors and the EAAB. Also in a spot of trouble is Ansie Fourie of Anzel Trading, for hands being dipped in the forbidden cookie jar. The company, officially known as Anzel Trading 1002 CC, trades in Pretoria as Investments @ Home. Realestateweb knows of at least two transactions in which monies were paid into Anzel's trust account but appear to have been misused. Fourie does admit to the siphoning off of funds but has blamed her former business partner for the indiscretions. So much for these property guys but the story really sending shockwaves through the South African property industry concerns one of the biggest companies in the country. Yes, Seeff Properties has found itself in the midst of its own little scandal. This concerns a fractional ownership scheme, whereby about 400 investors bought shares in a number of companies, each of which owned a luxury holiday house. The money they paid was supposed to be used to pay off the bonds of the properties. Fairly straight forward, unless of course the money doesn't get paid to where it should and these investors have found themselves still bonded to Standard Bank, who can call in these bonds. These shares were originally bought from Seeff/Golf & Leisure, a company in which Samuel Seeff, chairman of Seeff Properties, owned 51%. Seeff and partner, Stuart Manning sold their shares in 2007, to Henry Greyling, founder of Golf & Leisure. Seeff, of course, denies any wrong doing Greyling says there is a question mark over R58m but he doubts whether any of the money was stolen. He is prepared to put in R15m of his own money and has challenged Samuel Seeff to pick up the R10m; this would make up the R25m shortfall. Investors are claiming that Seeff is hiding behind the Golf & Leisure name and are adamant they signed their contracts with the Seeff Property organisation and that Seeff's name was the only one on the documentation. Investigations and audits are underway.