Media Statement - 16 August 2012
On the 31st of July 2012, an undertaking was made that I will appoint an Administrator for the Estate Agency Affairs Board. This followed a series of disturbing events with the potential erosion of good corporate governance within the institution and industry.
With an establishment of Human Settlements Ministry, Cabinet took a decision that all human settlements related legislation be located within the Department under the Ministry.
In this regard an Inter-Ministerial Committee (IMC) was established, chaired by Human Settlements. The Estate Agency Affairs Act (1976) was, with effect from May this year, operationally relocated from DTI to Human Settlements.
Whilst planning the proper incorporation process, a chain reaction of a series of events with negative consequences started to unfold around the Estate Agency Affairs Board, which I referred to above. They are as follows:
- The Wendy Machanik saga
- The acrimonious parting of ways with the former CEO - Nomonde Mapetla
- Auction Alliance
- Suspension of the Company Secretary
- Reinstatement of those suspended within few days
- Resignation of the Chairperson Ina Wilken
It soon became clear that the EAAB was dysfunctional. A meeting was convened with stakeholders a couple of weeks ago where I announced my intention to dissolve the Board and to appoint in its place an Administrator.
The Estate Agency Affairs Board is established in terms of the Estate Agency Affairs Act, 1976. Its mandate is amongst others:
- To regulate the conduct of the estate agency industry;
- To establish and manage the fidelity fund operating within the industry; and
- To set industry norms and standards.
The King Code I, II and III, the King Report on Corporate Governance of Public Entities together with the Companies Act and the Public Finance Management Act addresses critical requirements and elements of efficient and effective, well run corporate entities.
As a shareholder on behalf of government I am compelled to have a strong interest in the financial performance of all institutions reporting to me. There must be reporting and accountability arrangements facilitating appropriate oversight, and most importantly implement appropriate remedial action where an institution's strategic direction deviates from that preferred by the shareholder.
- APPOINTMENT PROCESS, PROFILE AND FUNCTIONS OF THE ADMINISTRATOR
To restore stability and good corporate governance, we have been compelled to implement remedial measures at the organization, inclusive of the following:
- Dissolution of the Board;
- Appointment of the Administrator to rescue the situation;
- Engagement of industry role-players to chart the way forward and leveraging the institution as a catalyst for the creation of cohesive communities.
The Administrator I am appointing is a dynamic, visionary and strategic leader. He is innovative, goal and performance driven. He has a proven track record on corporate governance issues. He has a vast knowledge and experience in financial planning, accounting, administration and matters of law.
Having consulted widely, including chairman of Edward, Nathan Sonnenbergs - Michael Katz, my decision is as follows: Mr Taswell Papier has been appointed as Administrator of the Estate Agency Affairs Board with immediate effect. He is the former President of the Law Society in the Cape of Good Hope. In the period between 2002 and 2004, Taswell Papier held several high-profile positions such as being Acting Judge of the High Court Cape Town, a Member of the Board of Control of the Attorneys Fidelity Fund and was also appointed by the Kimberly High Court as Receiver in Richtersveld land claims dispute matter where he took charge of the communal property association.
By its very nature, the tenure of the Administrator will be short-lived and will be in the position for six months. He is expected to:
- Implement appropriate turn-around strategies and measures to improve good corporate governance within the Estate Agency Affairs Board;
- Implement financial controls, systems and measures for prudent financial accountability and management;
- Provide strategic leadership and capability to the organization to restore its reputation;
- Ensure sustainability and organizational efficiency by implementing appropriate administrative and governance systems; and
- Implement the organizational strategic business plan and monitoring its performance.
Since the Board has been dissolved and there is a caretaker CEO, the Administrator will assume a dual role of providing leadership and strategic management to the EAAB and accounting authority. Legal requirements for the appointment of accounting authority as laid down by the Public Finance Management Act, 1999 will be adhered to.
The Administrator will be accountable to myself as Minister. The Administrator will prepare and submit performance reports on progress achieved in implementing strategies and measures to restore stability and corporate governance.
In conclusion, may I take this opportunity to wish the Administrator well in his new role. You have a responsibility to ensure that governance, transparency and accountability is restored within the EAAB.
Investors are looking for certainty and stability in this multi-billion rand industry. Buying property is a huge investment, hence the need for professionalism and quality service from all industry stakeholders.
We want to see all basic rules of good governance followed. The management and staff of the EAAB are expected to give you full co-operation. I'm looking for complete independence on your part. You are assured of my full support.
I sincerely thank you.