140710. Southern Sun Grayston Hotel in Sandton, Johannesburg. Auction Alliance CEO Rael Levitt before the Victory Theatre goes under the hammer but no one bought it. 732 Picture: Dumisani Sibeko 140710. Southern Sun Grayston Hotel in Sandton, Johannesburg. Auction Alliance CEO Rael Levitt before the Victory Theatre goes under the hammer but no one bought it. 732 Picture: Dumisani Sibeko
Cape Town - Fraud, money laundering, and a failure to keep accurate records of business, or wilfully destroying them, have emerged as some of the offences the Hawks are investigating in their probe into controversial auction house Auction Alliance.
In addition, they are tracking Auction Alliance founder Rael Levitt’s movements, meetings, travel plans and credit card records, along with his diaries dating back as far as 1993.
Today Weekend Argus can reveal the first details of the investigation. These are contained in annexures attached to papers which form part of a Western Cape High Court application the auction house lodged against the Minister of Police and a Cape Town magistrate, to challenge the constitutionality of search warrants authorising recent police raids.
The raids were conducted on August 7 at Auction Alliance’s offices in the CBD, the home of its former boss Levitt, the offices of accounting firm Accountants@Law, and at auditing firm KPMG.
Premises in other parts of the country were also raided.
Additional offences listed in the annexure, headed “Offences under investigation”, include a “failure to keep accounting records which accurately reflect and explain the state of affairs of all monies received or expended”, and a “failure to act honestly in conducting its affairs” – both allegedly in breach of the Estate Agency Affairs Act.
According to the search warrants issued, 20 police officials were authorised to search for a host of items, including Levitt’s diaries.
Any documents compiled to indicate his movements, meetings, travel plans and credit card records also formed part of the list.
The list also included documents which may be connected to any gift, payment, loan, and direct or indirect benefit which Levitt, Auction Alliance and the auction house’s entities gave or agreed to give to bank staff, liquidators or their families.
Another clause in the annexure specified that records could be seized which may have a bearing on a partnership or intended partnership with an entity known as Merobex, and a close corporation called Fosan Trading.
Other items included any financial records “of whatsoever nature”, including records of foreign bank accounts and tax returns with a bearing on the investigation.
In an affidavit before court, Levitt argued most of the offences listed in the annexures did not clearly specify who was suspected.
The application had two legs – one for an interdict to prevent the police from viewing material seized, and a second to challenge the constitutionality of the search warrants issued.
However, both came to an end this week when the parties reached a settlement.
In terms of the settlement, made an order of court by Acting Judge Rob Stelzner on Thursday, the police undertook to return the seized items.
The lawyers must retain the items in sealed exhibit bags until September 7, or until determination of any application for a subpoena or search warrant brought before that date.
The order recorded that nothing was seized at Auction Alliance’s Wale Street offices.
A copy of the documents presented to the magistrate during the application for the search warrants has to be provided to Auction Alliance.
The minister has undertaken to write a “without prejudice” proposal to Auction Alliance and Levitt on how police propose to be given access to the material seized.
fatima.schroeder@inl.co.za
Weekend Argus