Consumer Information

Author:  Ray Mahlaka
3 April 2022

Suspended property industry watchdog CEO draws legal dagger with human settlements minister

Mamodupi Mohlala has dragged the Property Practitioners Regulatory Authority board and Human Settlements Minister Mmamoloko Kubayi to the Johannesburg High Court to challenge her recent suspension.

The suspended CEO of the Property Practitioners Regulatory Authority (PPRA), Mamodupi Mohlala, is not going quietly.

The PPRA, formerly known as the Estate Agency Affairs Board, is a watchdog that regulates the affairs and operations of estate agents, and other functions in South Africa’s broader property industry.

Mohlala has dragged the PPRA’s board and Human Settlements Minister Mmamoloko Kubayi, who oversees the governance procedures of the watchdog, to the Johannesburg High Court to challenge her precautionary suspension on an urgent basis. She wants the court to declare her suspension “unlawful, unconstitutional and void”.

In court papers dated 31 March 2022, obtained by Business Maverick, Mohlala argues that the PPRA’s new board has no lawful authority to exercise any powers at the watchdog, including her suspension.

Mohlala’s central arguments in court documents are tied to recent legislative changes that govern the affairs of the PPRA.

The PPRA has far-reaching powers, including the ability to conduct inspections without notice if a property practitioner has been accused of wrongdoing, and to enforce more serious consequences for non-compliance to laws. To this effect, the watchdog went from being governed by the Estate Agency Affairs Act to the Property Practitioners Act, which came into effect on 1 February 2022 after President Cyril Ramaphosa signed it into law.

Mohlala said the PPRA’s board, which suspended her, is not legitimate because it was appointed by Kubayi on 26 November 2021 under the old Estate Agency Affairs Act. She said Kubayi appointed the new board before the new Property Practitioners Act had come into effect.

Mohlala also argued that Kubayi didn’t have the power to appoint a new board because the old Estate Agency Affairs Act gave the Minister of Trade, Industry and Competition (Ebrahim Patel, in this case) the authority to install a new board, and not her.

“I have been advised that from the aforesaid it is abundantly clear that the board of directors [of PPRA], which the first respondent [Kubayi] purported to appoint in terms of the Practitioners Act on 26 November 2021, when the said act had not yet come into operation was unlawful, illegal and unconstitutional — any steps or actions taken by the said Board would suffer from the same fate as the minister’s conduct as stated,” Mohlala said in court papers.

“The third respondent [the PPRA board] is consequently unlawfully constituted and thus whatever actions or steps it has taken or may intend to take would be unlawful. The third respondent has no authority and may not lawfully exercise any of the powers in terms of the Practitioners Act.”

Charges against Mohlala

Mohlala has taken umbrage at the PPRA board’s conduct in her precautionary suspension, saying she learned about her temporary ousting in the media. She became aware of her suspension when the PPRA board issued a press release on 28 March 2022. “The news was devastating and humiliating to me,” said Mohlala.

But the tenure of Mohlala, who was appointed in February 2019 on a five-year contract that is set to end in February 2024, is not without controversy.

She faces an ongoing investigation after whistle-blowers, via the office of the Public Service Commission, made allegations against her relating to irregularities about the loss of pension fund payments, and the irregular appointment of employees at the PPRA in junior, mid-level and senior positions.

In 2021, the Pension Funds Adjudicator Tribunal found Mohlala had disregarded pension fund scheme rules after issuing instructions for the suspension of several employees’ pension fund contribution deductions. The deductions had to be recovered and paid by the PPRA, with the board saying the amount “is significant”.

The PPRA board said it gave Mohlala enough time to respond to the allegations against her. But it found that her responses were “not adequately and convincingly dispelling the allegations levelled against” her.

Motives behind Mohlala’s suspension

Mohlala claims ulterior motives are behind her suspension.

She has accused two members of the board of interfering in the PPRA’s procurement procedures when they didn’t have the authority or mandate to do so. This alleged interference happened when she was the CEO.

Mohlala claimed Steven Ngubeni, the PPRA board chair, had pressured her to terminate the contracts of service providers and allegedly gave her names of preferred companies to be appointed.

This relates to the PPRA’s decision to appoint another service provider to deal with the PPRA’s investments and an insurer to underwrite professional indemnity insurance for the watchdog’s staff, which Mohlala said the organisation couldn’t afford because of its financial difficulties.

This insurance is usually taken out by companies on behalf of their staff to protect them from payments that they would have to make if they were found guilty of wrongdoing in their line of work.

Mohlala alleges that another board member, Shadeed Peters, asked her to solicit premium quotes from insurance companies. Some of the insurance companies that Peters allegedly asked Mohlala to solicit quotes from were associated with Peters. This, she said, amounted to a conflict of interest.

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