Quinton Brown, the owner of Constantia Sectional Title Management, a company that managed the funds of about 500 body corporates in the province, is said to have arranged an overdraft for a deposit on his house by pledging several investment trust accounts as security for a bank overdraft.
This came to light during a briefing by the Estate Agencies Affairs Board yesterday in Sandton, Johannesburg, attended by about 400 cash-strapped victims of the alleged fraud.
It appears from court papers that the total shortfall in the management company's main trust account, into which all payments for municipal services were made, is about R20-million.
Brown allegedly used this money to buy a Ferrari and a Mercedes-Benz SLK, and to make payments to members of his family.
Last month, just before a court hearing involving the board and Brown, an agreement was reached that the management company's accounts be frozen and that it be barred from operating.
Court-appointed curator Lawrence Moepi will administer the accounts. Pasco Risk Management was appointed by the board to investigate the misuse of trust funds.
Responding to a question about the integrity of funds held in trust by the management company in "savings" accounts separate from the main trust fund - called "call accounts" - Moepi told the briefing that it appeared that "certain accounts have been pledged to Nedbank on an overdraft".
Brown allegedly used the R3-million overdraft to pay a R2.5-million deposit on his R6-million home.
According to court papers filed in the earlier application, Brown had selected call accounts that were placed on fixed-term deposits with banks because he "knew that these monies would not be available to the body corporates at short notice".
Cash-strapped owners have been left in the lurch because they are not able to sell their properties and they owe municipalities in Gauteng huge amounts that were not paid by the management company.
Keith Bateman, a property owner who is also responsible for a body corporate that owes the Johannesburg City Council R200000, said: "I would have liked to see Mr Brown arrested and taken to court."
He said property owners "have been chucked into a process we have no control over".
Another public briefing will be held in Pretoria today.
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