29 Feb 2012
Two banks have stopped trading with Auction Alliance, which has been accused of paying kickbacks for preferential treatment, it was reported on Wednesday.
Investec and First National Bank (FNB) have halted trading with Auction Alliance whose CEO Rael Levitt has stepped down pending the outcome of an investigation into the allegations.
"We've temporarily suspended giving work to Auction Alliance and are reassessing our relationship with them," Ciaran Whelan, global head of risk at Investec, told The Star newspaper.
The newspaper reported that FNB had also cut ties with Auction Alliance.
The Saturday Star recently reported that it had been alleged that banking staff were paid large sums of money to ensure that Auction Alliance receives preferential treatment.
Levitt has denied all the allegations.
In an interview published in The Citizen on Wednesday, Levitt said only 15 percent of Auction Alliance's business was generated from banks and liquidators.
He said he was unaware of commission payments by Auction Alliance to bank employees, liquidators or court officials in their personal capacity, but that the company was investigating each allegation through a firm of independent forensic analysts.
He stood by the company's belief that vendor bidding - or "ghost bidding" was "100 percent lawful" to protect reserve prices.
"What we have discovered is although they are industry norm and are lawful, the public finds them distasteful. That is one of the issues that our independent report will look into," he told the newspaper.
He said people sometimes asked for a vendor bidder if they had not bid before, or to avoid media attention.
The mistake Auction Alliance had made as a business was in not clearly explaining the intricacies of auction methodology, he said.
"For that mistake I have personally fallen on my sword."
He felt that the media coverage given to the allegations was a one-sided disaster, and that there had been no credibility check of those who had made the allegations. - Sapa
House for sale in Glenwood R 1 650 000
House for sale in Sunward Park R 1 550 000
House for sale in Parkdene R 1 380 000
House for sale in Sunward Park R 1 850 000
House for sale in Sunward Park R 1 390 000
House for sale in Noordwyk R 1 695 000
House for sale in Krugersdorp West R 698 000
House for sale in Grove End R 530 000
House for sale in Lynnwood R 1 600 000
House for sale in Paarl North R 1 420 000
If you are using Internet Explorer 8 or higher, please verify that your Internet Explorer compatibility view settings are not enabled.
For the best browsing experience update to the latest Version of Internet Explorer or try out Google Chrome or Mozilla Firefox.
Please contact our Customer Service Centre for further assistance. Tel. +27 (0)861 111 724