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Property watchdog chases its tail after ethical issues...

DM168

REGULATOR BATTLE

Property watchdog chases its tail after ethical issues split top leadership

Mamodupi Mohlala, the CEO of the Property Practitioners' Regulatory Authority. (Photo: Russell Roberts / Gallo Images / Financial Mail | Graphics: Vecteezy / iStock)

The state-run watchdog that is meant to protect existing and prospective homeowners from unscrupulous practices by real estate agents in South Africa’s R5.8-trillion property sector is facing ethical issues that have caused ructions in its top leadership structure. 

Mamodupi Mohlala, the CEO of the Property Practitioners’ Regulatory Authority (PPRA), has been suspended for nearly a month while she faces an investigation relating to allegations of administrative and financial misconduct. This has left the property watchdog leaderless and rudderless.

Mohlala was in a legal battle with the PPRA’s 12-member board about how it has handled her precautionary suspension, pending the conclusion of the investigation. Mohlala, who was appointed in February 2019 on a five-year contract, has approached the High Court in Johannesburg to declare her suspension illegal.

On 14 April, the court dismissed Mohlala’s case, saying her precautionary suspension was lawful affirming the board’s decision to temporarily oust her from the PPRA while the investigation against her is ongoing.  The dismissal of Mohlala’s court case means that the PPRA won’t have a permanent CEO until the conclusion of the investigation, which the board expects to run for a month or even longer. 

The timing of the PPRA’s leadership instability couldn’t have been worse, considering that the housing market has been a bright spot for the economy since the start of the Covid-19 pandemic. The low interest rates, which have helped cash-strapped consumers get through the pandemic, has led to an influx of first-time homebuyers. It is imperative that the PPRA functions smoothly and have strong leadership to protect these buyers and respond effectively to the public’s complaints. 

The official line from the PPRA board is that Mohlala faces allegations of wrongdoing, brought forward by a whistle-blower via the office of the Public Service Commission (PSC), which is entrusted with monitoring and evaluating the performance of the public service, including the PPRA (a public entity). 

The PPRA’s chair, Steven Ngubeni, who leads a board that was appointed on 26 November 2021 by Human Settlements Minister Mmamoloko Kubayi, says the board was compelled to investigate after it was made aware of the allegations at the PSC. 

Irregular appointments and pension fund payment issues

The allegations relate to Mohlala’s irregular appointment of at least five employees at the PPRA in junior, mid-level and senior positions over the past three years, and irregularities overseen by her regarding the loss of pension fund payments. 

The whistle-blower, understood to be a PPRA insider, alleged that there were staff members who received their salaries without pension fund deductions but ended up receiving pension benefits.

 The whistle-blower also alleged that Mohlala was aware of the nonpayment of pension fund contributions worth at least R16-million, saying that she received advice on the legality thereof, and later informed the PPRA’s human resources department to stop deducting money for contributions. 

In court papers, Mohlala denied allegations that she was behind the irregular appointments of PPRA workers and instructing some workers to not make pension fund contributions.

But Mohlala already has an adverse ruling on the allegations relating to the pension fund non-payments. In 2021, the Pension Funds Adjudicator Tribunal found that she had disregarded pension fund scheme rules.

New allegations of wasteful expenditure

But the allegations of wrongdoing go beyond irregular appointments and the nonpayment of pension fund contributions. Whistle-blowers have started submitting evidence, some of which implicates her in wasteful expenditure at the PPRA to the tune of millions of rands. 

DM168 has seen copies of the whistle-blower submissions to the investigation. The wide-ranging submissions include the PPRA’s bank statements and purchase order documents, which detail the watchdog’s procurement of goods and services from suppliers. 

The alleged wasteful expenditure relates to two instances in which PPRA procured goods and services from February 2022:

The first was an expenditure of R378,000 for catering services (the provision of breakfast, tea, snacks and lunch) covering the periods of 15 to 17 March 2022, for real estate experts from Namibia who visited South Africa to study the PPRA’s systems and regulatory framework. A senior PPRA insider, whose identity is known to DM168, has questioned whether it was justified because “there were only three individuals in the Namibian delegation”. A purchase order, a document confirming the PPRA’s need for catering services for 120 delegates from Si Mane Projects for R378,000 and dated 22 March 2022, carries Mohlala’s signature approving the expenditure. 

The second allegation relates to the PPRA’s purchase of study guides that would be sold to people who wanted to be real estate agents. The information supplied by whistle-blowers suggests that the PPRA spent R801,500 on study guides from 22 February 2022. This expenditure was in two tranches and paid to a supplier called DVF Enterprise (Pty) Ltd. It included the purchase of 500 level-4 qualification study guides at R400,750, and 500 level-5 study guides at R400,750. The information supplied to officials of the investigation suggests that Mohlala authorised the expenditure on 24 February 2022. The senior PPRA insider said the study guides were never delivered to the intended recipients. 

Mohlala responds via court papers

It is important to note that the investigation against Mohlala is still ongoing and there have been no findings of wrongdoing against her. Mohlala might be cleared of wrongdoing, paving the way for her to resume her duties as the PPRA CEO. 

DM168 sent Mohlala a list of questions about the expenditure on catering services and study materials. She initially made an undertaking to respond to the questions but didn’t at the time of publishing the article. 

Defenders of Mohlala, some of whom DM168 spoke to, said she is being targeted by members of the PPRA board because she is starting to reform the watchdog by filling positions that have been left unoccupied for many years, and turning around the PPRA’s difficult financial situation.  Mohlala believes that her precautionary suspension as the PPRA CEO is being driven by ulterior motives and attempts by some board members to capture the watchdog’s procurement budget. 

In her court papers, Mohlala has accused two board members, Ngubeni (the chair) and Shadeed Peters (an ordinary board member), of interfering in the PPRA’s procurement processes, giving her names of preferred companies that were linked to them. 

Ngubeni and Peters have denied Mohlala’s claims in papers before the court. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.

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