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Monday Sep 17, 2012

R1m 'wasted' over Auction Alliance

The National Consumer Commission, established to protect consumers, has run up a R1-million legal bill in its failed efforts to get to the bottom of allegations around the controversial auction house Auction Alliance - money that will ultimately be paid from consumers' taxes.

That's according to Auction Alliance attorney Alan Smiedt, who said the company was owed more than R1m in legal fees by the beleaguered commission. And that sum would have been higher if Auction Alliance had persisted with its court application against the commission - wanting to have a summons that was issued to former company chief executive Rael Levitt reviewed and set aside.

The application, which was filed in the Western Cape High Court in August, related to another summons the commission had issued - for Levitt to appear in order to answer allegations relating to the sale of two properties - a plush residence in Hyde Park in Joburg, and the farm Doornkraal, in Pretoria.

The properties were sold last year, before the Quoin Rock wine estate auction and the fake biddingwhich blew the lid off the Auction Alliance practice.

The summons was issued in July, with Levitt asked to appear before the commission on August 16. However, shortly before that, Levitt and Auction Alliance approached the court to ask that the summons be set aside.

They argued that it was the product of an investigation which was "irregularly and unconstitutionally" initiated.

In addition, Levitt claimed there were defects with the summons, including the fact that it cited a section of the Consumer Protection Act which did not exist. He also attached a controversial secret report compiled by the National Consumer Tribunal, in which it lambasted the commission's handling of investigations into consumer complaints.

Smiedt wrote to the commission and its then-commissioner Mamodupi Mohlala-Mulaudzi to query not only that summons, but also summonses issued in respect of two other complaints against the company before the commission.

When he received no response, he took the legal route.

Eventually, days before the case was scheduled to be heard, Auction Alliance withdrew the application.

Smiedt told Weekend Argus this week the application was withdrawn after the commission agreed to drop the summonses if "we don't ask for a cost order against them".

This meant the commission could issue new summonses, but he said he doubted it would do so.

Smiedt also confirmed that the Hawks were still investigating the Quoin Rock scandal.

Asked to comment, the acting consumer commissioner Ebrahim Mohamed confirmed this did not mean other summonses could not be issued. The commission was assessing all cases to decide the best way forward.

Mohamed added that it would be premature to say whether another summons would be issued.

Weekend Argus (Sunday Edition)

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