Vendor bidding, the game of auctioneers

Image: www.cesapurchasing.org

The Supreme Court of Appeal has dismissed arms manufacture, Ivor Ichikowitz’s appeal with cost, to have High Street Auction pay back 10% commission he paid and for the sale of the game reserve invalid. Ichikowitz bought Thaba Phuti, a lodge and game farm near Rustenburg, for R20 million in 2011.

Ichikowitz accused the auctioneer, Joff van Reenen of faking bids to inflate the price of the property because other bidders were non-existent, in a practice called “Vendor Bidding” or “Ghost Bidding”. 702 presenter, John Robbie spoke to Tirhani Mabunda, CEO of African Training Academy and School of Auctioneers about the legalities of vendor bidding. Mabunda confirmed that vendor bidding is legal as long as the bidder is notified beforehand according to section 45 of the Consumer Protection Act, Act 68 of 2008. Mabunda says vendor bidding is practised across the world.

Section 45 of the Act states that, unless notice is given that a sale by auction is subject to a right to bid by, or on behalf of, the owner or auctioneer: (a) the owner or auctioneer must not bid or employ any person to bid at the sale; (b) the auctioneer must not knowingly accept any bid from any such person, and; (c) the consumer may approach a court to declare the transaction fraudulent if this undertaking has been violated

What is 'Ghost' bidding or 'Shill' bidding?

Shill or ghost bidding is when sellers use memberships of people they know, or fake memberships they have created, to put false bids on auctions in an attempt to up the price of the property they are selling. A genuine auction requires the seller to set a reserve – the minimum price which the seller is willing to sell the property for.

John also spoke to auctioneer Joff van Reenen of High Street Auctions who said that proper procedure was followed during the auctioning of Thaba Phuti game lodge. According to van Reenen bidders need to know how to protect themselves against Ghost bidders, a process which is highly illegal.

There is a difference between vendor bidding, which is legal, and ghost bidding, which is absolutely illegal

How to protect against ghost bidding?

  • Know your rights as a buyer/bidder
  • Be attentive when rules are read prior the auction
  • Ask questions anytime (who is bidding, May I see the bidders record)
  • Everything should be transparent and the auctioneer should have all the documents.

To know more about the rules of auctioning click here

Read More
Major medical breakthrough: New gene pegged as cause of heart attacks in youth

Major medical breakthrough: New gene pegged as cause of heart attacks in youth

This is being called the biggest medical advancement in South African cardiology since Dr Chris Barnard's first heart transplant.

Parents urged to check tertiary institutions are legit before registering kids

Parents urged to check tertiary institutions are legit before registering kids

The Council on Higher Education says parents need to be wary of the increasing number of fly-by-night tertiary institutions.

New app to detect hearing loss

New app to detect hearing loss

University of Pretoria has developed a new app which uses a smartphone to detect hearing loss.

What we can expect from SABC after inquiry consolidates

What we can expect from SABC after inquiry consolidates

SABC's leadership and parliament has come under fire since the inquiry into the board's fitness to hold office.

LISTEN: Radio veterans, Gordhan, sports stars, celebs say bye to John Robbie

LISTEN: Radio veterans, Gordhan, sports stars, celebs say bye to John Robbie

John Robbie's 30-year run in radio has come to an end with friends, callers and colleagues wishing him a heartfelt goodbye.

2016 news wrap: A look back at the stories that grabbed SA's attention

2016 news wrap: A look back at the stories that grabbed SA's attention

Barry Bateman spoke to Stephen Grootes to unpack the meaning behind the stories that dominated the headlines in 2016.

Popular articles
Best bank ad ever? Andy Rice reviews Investec’s “you’re more than data”

Best bank ad ever? Andy Rice reviews Investec’s “you’re more than data”

The Money Show’s Bruce Whitfield interviews the advertising expert about the best and worst new advertisements.

Police apparently mulling over warrant of arrest after Grace Mugabe a no-show

Police apparently mulling over warrant of arrest after Grace Mugabe a no-show

EWN understands that lawyers representing the Zimbabwean first lady are negotiating with officers at the Sandton police station.

[LISTEN] 20-year-old SA woman traumatised by Grace Mugabe's assault

[LISTEN] 20-year-old SA woman traumatised by Grace Mugabe's assault

Gabriella Engels says she is saddened by people who are calling her names on Twitter before they understand the full story.

Traffic gridlocked as Imizamo yethu residents make their way to Cape Town

Traffic gridlocked as Imizamo yethu residents make their way to Cape Town

About 40 minibus taxis, in a convoy at a very low speed, are transporting Imizamo Yethu residents into CT for a planned protest.

Words you’ll hear: Grace Mugabe's latest nickname

Words you’ll hear: Grace Mugabe's latest nickname

Find out why Zimbabwe's First Lady should be dubbed with the moniker 'extension cord'.

Discovery CEO (and founder) Adrian Gore bares his soul about money

Discovery CEO (and founder) Adrian Gore bares his soul about money

The Money Show’s Bruce Whitfield interviews Gore about his attitude to money (hopes and fears, successes and failures, etc.).

Ocean Basket gives franchise owner the chop after assault video

Ocean Basket gives franchise owner the chop after assault video

The man was immediately divested of his shares and is no longer part of the group, explains Ocean Basket CEO Grace Harding.

WATCH: Cape schoolkids 'starstruck' after Trevor Noah,  Charlize Theron drop by

WATCH: Cape schoolkids 'starstruck' after Trevor Noah, Charlize Theron drop by

Oaklands High principal Reza Patel says it was an extremely exciting experience for both the learners and staff. We can imagine!

CoCT explains new electricity tariffs

CoCT explains new electricity tariffs

Following residents concerns over new electricity tariffs and properties being re-evaluated, Johan van der Merwe provides clarity.