'I made mistakes' (Levitt): Cynthia Schoeman - MD, Ethics Monitoring & Management Services

Proper context of the disgraced auctioneer’s weekend media coup.

ALEC HOGG: Tonight we are talking ethics. Over the weekend Rael Levitt, the disgraced auctioneer of Auction Alliance fame, was all over the weekend press. He responded by emails to some questions saying, “It wasn’t my fault” and “I'm the victim of all of this”, etc, etc. So I asked Cynthia Schoeman, who’s the managing director of Ethics Monitoring and Management Services, what she made of all this.

CYNTHIA SCHOEMAN: The headline is “I made mistakes” – let’s pause for a moment. Systematic kickbacks over goodness knows how many years, a ghost auction – this doesn’t constitute a mistake.

ALEC HOGG: If you have a look at Rael Levitt’s blog, and I’m not sure if you’ve had that opportunity yet, he calls it “Levittation” – it’s there on the internet. On the front page of his blog is none other than Jacob G Zuma, whose education trust raised, well, was part of an Auction Alliance operation to raise R2m. Now, if I was Jacob Zuma’s office I might call Mr Levitt and say, hey, get me out of there.

CYNTHIA SCHOEMAN: Exactly. And that’s part of the problem. Apart from the unethical practice, the reputation sticks to others as well, which is why we quickly want to distance ourselves from people. But I think one of the noteworthy things about the Sunday articles was that he’s effectively casting this over all the industry. In fact, internationally he’s saying of course ghost auctions happen. That would be troubling if I were in that industry, but maybe he’s right. Maybe it is as widespread as that.

ALEC HOGG: This is a gentleman not short on self-belief, but I think more important from our perspective is what do we do about it? What does the public do about an area which now does seem to be fraught with problems?

CYNTHIA SCHOEMAN: I think while one wouldn’t want to try and discourage one from using the auction industry when it’s appropriate, I think this just raises a whole lot of warning signs that alert one to what shouldn’t happen. And I think it would be perfectly fair to say, “Can I have some assurance of the ethical practices of this business? Can I be assured that you’re not paying kickbacks?” Now, of course they could give you the glib answer of “Of course we’re not”. But I think that the awareness of this, raising it onto the table, I think does start to put greater pressure on people to act appropriately. But also, ironically, I think these huge scandals do tend to shake up at least the industry, if not further afield.

In the article I wrote for you I really questioned whether anyone learns from someone else’s ethical failure. But certainly within this industry I think it’s a huge wake-up call to say, listen, whatever you have been doing, now is a really good time to stop, and why don’t you truly get your house in order? Not just to say you haven’t done anything wrong, but to start actively managing ethics as a key facet of your business.

ALEC HOGG: That’s Cynthia Schoeman, managing director of Ethics Monitoring and Management Services. As she was talking I pulled up RaelLevitt.com – who’s on the front page there, Dave?


But, achieving an ethical culture is not an automatic guarantee for the future.

ALEC HOGG: I think this is crazy. Mac Maharaj, get onto it. Get the Prez off there, please. We don’t want him to be associated with this scallywag who pulls ghost bids and says “it's just the way we do business”. My word! Well, Dave, we are winning, aren't we? I think the good guys are winning; slowly but surely these unethical practices are being rooted out of our society.

DAVID SHAPIRO: Ja. But I think we've got to do something about it as well. Shareholders, people who own shares in these economies have also got to start asking questions. [It's not enough] to have an audit committee because that just looks at the numbers. You’ve got to ask, you’ve got to go further.

ALEC HOGG: Start with MTN? Why should MTN profit in a country which throws its intellectuals into jail, as we heard the other night from Iraj Abedian.

Interview with Alec Hogg broadcast on the SAFM Market Update programme
on 16 April 2012