Arguably the most disgraceful estate agent that has ever operated in South Africa, Wendy Machanik, has finally spoken publicly about her actions, and taken full responsibility for her public and humiliating downfall.

Machanik wrote an opinion piece that was published in the Business Day yesterday, in which she speaks of the millions she unlawfully accessed via her company’s trust fund.

Writes the apologetic former mogul:

If one were to believe the reports about my very public and humiliating case over the last two-and-a-half years, one may have come to the conclusion that I was yet another high-profile white-collar criminal who was caught red handed with her fingers in the kitty.

Depending on who was doing the reporting, I was alleged to have defrauded my company, customers and agents to the value of between R20-million and R80-million in over 90 instances of fraud.

I’d like to hereby state clearly and unambiguously that, yes, I am guilty of unlawfully accessing my company’s trust fund to the value of over R17-million – but not in the manner or for the reasons portrayed.

I write this not to justify my actions, for which I will be forever deeply regretful, but to serve as a cautionary tale to all business people and government officials who may find themselves in a similar predicament to that in which I found myself five years ago.

Prior to 2007, Wendy Machanik Properties, WMP, had grown into one of the largest property companies in Gauteng and Cape Town. It was a business I had started in my garage in 1989 as a single mother to provide for my children. At its peak, WMP boasted an average monthly turnover of over R130-million, employing over 300 people.

In 2007 the global financial crisis hit and everything changed. Even the largest companies in the world were folding or risked foreclosure. The local real estate industry was among the first and hardest hit. The housing market rapidly dried up, banks drastically reduced the amount of bonds they were granting and cash flow became a serious and ever-increasing problem.

We instituted massive cost-cutting measures across the board in order to keep the business afloat, including closing several branches. By 2008 our revenue was slashed by two-thirds, we had around 160 employees and we were still haemorrhaging cash. In order to try and stop the bleeding I took out massive loans and poured my personal savings into the business. But it wasn’t enough.

Looking back now I know what I should have done. I should have allowed the company to fold, declared bankruptcy, and walked away. But I couldn’t allow myself to do that. I felt it was my responsibility to my employees and their families they were supporting. So I did the unthinkable. I accessed the trust account in order to save the business.

Over a three-year period I had accessed the account over 90 times. As cash came into the business, it went back into the trust. By 2010 I had not only replaced all the monies owed to the trust account, there was actually a surplus of over R1.2-million. The market had picked up, the business was solvent again and I was able to repay all the emergency loans. No customers had been adversely affected by the transactions.

I thought it was all behind me, until I was summoned to a late-night meeting at an upmarket hotel in Johannesburg, by individuals who insisted they knew what I was up to. Like a scene out of a gangster movie, I was told to either pay over a certain sum of money or they would go to the authorities. They then proceeded to show me copies of my bank statements from my trust account.

I refused to allow myself to be extorted and immediately left the meeting. Shortly after, a whistleblower from within the company approached the Estate Agents Affairs Board, which led to a formal inquiry. This, of course, was followed by due process in the courts, and relentless media attention.

Today my fate has been decided by the court. Among other penalties, I have been stripped of my real estate licence and I’m about to commence long-term house arrest.

I barely have a penny to my name and have been blessed with the support of family and friends, who have helped me in a myriad ways, including helping me pay off an enormous bail.

But perhaps the worst part of the entire saga is the fact that my staff, the very people I sought to protect from losing their incomes, ultimately were out of a job as the company was forced into liquidation. For that I will always feel regret.

In the end, though, I take full responsibility for my actions and I hope this serves as a deterrent to those in business and government alike.

[Source: BusinessDay]