Property Practitioners Board vows to clean house after probe confirms fraud allegations against CEO, staff

The board of the Property Practitioners Regulatory Authority (PPRA) – known until February this year as the Estate Agency Affairs Board – has vowed to take immediate action against parties implicated in a forensic investigation into fraud at the PPRA from 2011 to 2021. 

The PPRA is a state-run regulator for the property sector. It is intended to act as a watchdog for estate agents. 

Chairperson Steven Ngubeni told the media on Wednesday, 7 September that soon after the new board was appointed they received a report from the Public Service Commission, based on a whistle-blower’s damning allegations against the PPRA’s CEO, Mamodupi Mohlala. She, however, declined to respond.

Months later, on 28 March 2022, the board placed Mohlala on a precautionary suspension and launched a forensic investigation. 

On 13 July 2022, the board gave an update, saying that based on the preliminary findings, further serious allegations against the CEO and other staff members had been made. It then subjected her to a disciplinary process and referred allegations of fraud and other financial misconduct to the SAPS. 

PPRA board member Pamela Makhubela explained that the forensic investigation had now been completed, confirming the allegations against Mohala included contraventions of pension fund legislation and rules, irregular appointments of staff, appointments of underqualified persons, flouting of procurement processes leading to irregular, fruitless and wasteful expenditure and fraud. 

Mohlala, meanwhile, is taking the matter to the CCMA, with a hearing set down for 26 October 2022. 

The board’s acting CEO is now taking legal advice and wants to recoup the financial losses from the implicated individuals.

Ngubeni said the report found the authority was “run as a spaza shop” under Mohala’s watch. She was appointed in 2019. 

The final report directly implicates Mohala for not only failing to ensure that pension fund contributions were collected and paid over to the pension fund, but also instructing that contributions must not be made. The board called her conduct an “outright dereliction” of her duty as CEO. She was also found to have made irregular appointments of staff to positions without having the required minimum skills and qualifications.

Some of these unnamed individuals who were declared not fit and proper were appointed to critical positions in supply chain management (SCM) within the PPRA. This, the board said in a statement, is concerning given the background of corruption at the authority. 

It said human resource files were removed at the behest of the suspended CEO and to date they “cannot be traced in the PPRA premises”.

“Considerably some of these files involve the HR files of staff members implicated for flouting of procurement processes or for irregular appointments. [There] is to date a lack of documentary evidence to verify that the recruitment and selection process was followed during the appointments of key positions approved by the suspended CEO.”

This complicated the work of the forensic investigations team. 

“It is alarming that integrity and honesty have been vitiated without conscience that some of the implicated individuals have misrepresented their qualifications. The entity incurred a loss due to the misrepresentation of qualifications and paid excessive salaries to undeserving individuals because of this misrepresentation of qualifications.” 

The PPRA, insisted the board, would recover losses from those involved in the fraud. 

The report furthermore highlighted a “discomforting arrangement” in which SCM reported directly to the CEO, instead of the chief financial officer, which is in contravention of the Public Finance Management Act.

Ngubeni said what is happening in the authority is not a battle between the board and management. “We were called upon to act on this situation. We hope our interventions will avoid such occurrences in future, so there is stability. We are charged with the transformation of the property sector. We believe we are starting on a clean slate.”  

The board was looking forward to dealing with the matter expeditiously so it could get on with its work. “It’s an unfortunate situation [that we find ourselves in].” 

Ngubeni also confirmed that the Public Protector had launched an investigation into the matter.

Further findings include: 

Study guides unaccounted for: The PPRA had ordered 1500 study guides and paid a 50% deposit, with no record of delivery of 1,000 guides. The SCM officer signed off on this delivery though, without verification, which indicates fraud and collusion, and instructed the finance department to pay the R401,000 deposit – signed off by Mohlala. Ngubeni said they believe the guides were never bought nor delivered.

Namibia Delegation: The service provider was not vetted for tax or BEE compliance. The visit by the delegates was for two days, on 15 and 16 March 2022, yet the supplier invoice was made out for three days. The number of people who were catered for at the function was at the maximum of 40, but the invoice issued was for 120. The finance department queried this but the CEO signed off on the invoice.

Rural Brands: Rural Brand Technologies was paid for an app to facilitate the PPRA applications and the issuing of Fidelity Fund Certificates, but the app does not work. Mohlala approved payment of R495,000.

Makhubela confirmed that the new board, which comprises members of the legal fraternity, property experts and representatives from the Department of Trade, Industry and Competition and the Public Works Department, found the EAAB/PPRA “very challenged”. 

“People that also, like myself [an attorney], deal directly with property practitioners and obviously see what is happening on the ground. We have to make sure that we obviously expedite issues that have come up. 

“We are very clear that we are going to act with immediate effect towards the specific parties and the individuals that were implicated in this.”

Mohlala is a former National Consumer Commissioner, who left the commission under a cloud in 2012. At the time, when former trade and industry minister Rob Davies declined to renew her contract, she claimed victimisation. 

Mohlala joined the National Consumer Commission in 2010 as part of a settlement brokered by the Department of Public Service and Administration, after then communications minister Siphiwe Nyanda fired her as director-general. 

She took the matter to the Johannesburg Labour Court but was unsuccessful. After former president Jacob Zuma’s alleged intervention, Mohlala was then appointed to an equivalent position elsewhere in the public service for the remainder of her contract as head of the commission. BM