Fallen property icon Wendy Machanik: What I learnt from the experience

Three years ago, Wendy Machanik was one of the South Africa's most recognisable names – an estate agency queen whose agents sold thousands of homes, leading from the front with personal sales of R2.4bn. But during the 2007/8 Global Financial Crisis Machanik dipped into her 320-agent firm's client trust fund to smooth over a cash flow crunch. Although all that money was repaid, a few years later "East European thugs" threatened to use media contacts to expose what she had done – unless she paid their blackmail demand of R30 000. Machanik refused and the rest is history. In this deeply moving Podcast she tells her story, what she learnt from the media battering and why respected business people like billionaire Natie Kirsh stood by her. – AH.ALEC HOGG: Wendy Machanik is with us in the studio. You've been out of the news for a long time Wendy, but let's start at the beginning. You've got a most unusual name..WENDY MACHANIK: Machanik, well I married into that name, so it's not by birth. I sold real estate for many years, and always in the same area, and I became so well known that people weren't calling in the company that I was working for, they were calling in Wendy Machanik. That kind of said to me I should go on my own, and that's how it started..ALEC HOGG: You developed into an enormous business, at the time of all the….WENDY MACHANIK: Yes, it was an empire. I had 320 agents, and as an agent, I sold approximately R2.4bn worth of property myself..ALEC HOGG: Extraordinary. How did you get there though? What was your secret because you don't just grow a business like that by accident?.WENDY MACHANIK: I think hard work and, obviously leadership qualities that were within me..ALEC HOGG: What's hard work in your opinion?.WENDY MACHANIK: Very hard work. We talk 16 and more hours a day, seven days a week. It is not only about show houses. Your day starts…my day used to start at 06:00 and I'd plan my day, and go through the day generating priorities and, from there, I would look at what was the most important thing that I needed to be doing right now. That's what drove me and sometimes I used to get home at 22:00/23:00, (at night) after closing deals..ALEC HOGG: Are you a lister? Do you write lists and prioritise?.WENDY MACHANIK: I had a 'daily to-do-list', which I prepared the night before, every single day, and that went next to my bed, so if I thought of something during the night I'd scribble it down, which invariably did happen..ALEC HOGG: It's interesting in the South African context of real estate. You have some very, strong women, clearly yourself. You built an enormous company, Pam Golding comes to mind, Aida Geffen..WENDY MACHANIK: Absolutely – doyennes..ALEC HOGG: Did you use them as role models or who was your role model?.WENDY MACHANIK: I think Aida, particularly..ALEC HOGG: Did you meet her? Did you work for her?.WENDY MACHANIK: Yes, I worked for her for two years, and she was divine. I was very, very fond of her..ALEC HOGG: What made her different?.WENDY MACHANIK: She's very clever. Her ingenuity was quite unmatched. She was intuitive. She saw things and she was a leader. She could direct very, very carefully..ALEC HOGG: Clearly, you had leadership qualities because you don't build a business like that again, as I said..WENDY MACHANIK: No, it's true..ALEC HOGG: Where did you learn those?.WENDY MACHANIK: I think leadership is a skill and your personality certainly does come into play. I think you need to also, be intuitive. You need to have compassion. You need to be excellent at communicating and you need to love people, which I do. I'm passionate about people, I could almost say, I love them unconditionally..ALEC HOGG: I guess, given what you've gone through, that must be very difficult. Let's just go into that difficult time that you had..WENDY MACHANIK: Yes..ALEC HOGG: The media was all over this Wendy Machanik, this icon of the property industry, being dipping into Trust Funds. Was it something that you'd ever done before?.WENDY MACHANIK: No, the recession caused that to happen and I don't believe that I was alone in doing that. I think there were many, many companies doing it but, at the end of the day, if I look at how the media; the media were cruel. They were devastating and they really took me to task and told, what I call, a lot of lies..ALEC HOGG: They didn't really understand it perhaps..WENDY MACHANIK: I don't know. I think they were, fed nonsense from the 'whistleblower', the person who went to the Board and told the Board that I'd been working in my Trust Account..ALEC HOGG: So your Trust Account was almost used like a revolving credit facility?.WENDY MACHANIK: That's what I did. I had to do that to keep my doors open. Banks were declining bonds left, right, and centre. We did R80m the one month, and R80m deals fell through because we couldn't get them bonded..ALEC HOGG: But I think the important thing was that you always found a way of repaying what you took out of there..WENDY MACHANIK: I've put every cent back. It was, in fact, at the end of the day (when the last transfer went through), there was R1.2m surplus in my Trust Account. Mine was a victimless crime, truly speaking..ALEC HOGG: Well, it didn't appear like that. Certainly as, your circumstances, you then went to Court. You, on the last (again on the 11th hour) you apparently fired your lawyer. What's the story there?.WENDY MACHANIK: It's a bit sensitive, so I'm not inclined to really, talk about it, but I didn't believe that the first served my purposes very well, which the second lawyer, absolutely was fantastic. He was brilliant. They did so much for me. Sam Cohen, my Advocate, who's worked for me throughout this time, pro bono, and my Attorney, Michael Sillerman, has been brilliant..ALEC HOGG: Now, that's the interesting point, so you get someone like Sam Cohen. I met with Natie Kirsh a few years ago and he said 'you have to go and look at the Wendy Machanik story. It is not what it seems to be. She's a good person'..WENDY MACHANIK: Ah, shame, this is true..ALEC HOGG: What is it? You've got friends, clearly, who stand by you, but then you've got the media who seem to have been used, perhaps, by someone else. What is it about you that has got people like Natie Kirsh and Sam Cohen, who were prepared to go on record to support you?.WENDY MACHANIK: I must tell you, I am very humbled by the way; they've been good to me. I have no words. I am deeply, deeply grateful to God and to them..ALEC HOGG: Do you think that what happened was that they also got a bit irritated that you got a raw deal?.WENDY MACHANIK: I think indeed, yes. Certainly, Sam and Natie are two people that did believe that I got a raw deal..ALEC HOGG: Wendy, getting back into your story. The way the record seems to put it, at the moment, was that you had been using your Trust Account as a revolving credit facility, as you say, you've repaid everything (but you weren't the only one doing it) but somebody found out and then tried to blackmail you, is that accurate?.WENDY MACHANIK: That's true. That is absolutely, accurate..ALEC HOGG: Who?.WENDY MACHANIK: I don't think it is wise to start mentioning names but I do know who the person is. Fortuitously, the name came up and that's how I knew who it was..ALEC HOGG: So nobody came directly to you and said, "I'm going to blacken your name.".WENDY MACHANIK: Yes, I was met by East European thugs, that's all I can call them. They were tattooed from head-to-toe and these people said to me that for R30.000, they would reveal who is trying to pull me down, in my company. I said, "But that's extortion." That's actually blackmail and I said 'whilst I made a mistake and worked in my Trust Account I'm not a crook and I'm not going to get into that'. They said 'you'll be sorry. We're going to pull you right down. You'll be in all the media and we'll destroy you and destroy your business' and that's what they did..ALEC HOGG: Any regrets?.WENDY MACHANIK: No. That I didn't work with them? Absolutely no regrets, my conscience is clear..ALEC HOGG: R30.000 that seems like a pittance..WENDY MACHANIK: No, it wouldn't have stopped there. They would have come back for more and more, I've no doubt..ALEC HOGG: I guess it's also like when people bribe traffic cops, R200.00 when you are driving under the influence, then of course it becomes worse. There's a line somewhere, isn't there?.WENDY MACHANIK: Absolutely..ALEC HOGG: But why, just get us back into these Trust Accounts because that really is something that is not well understood. Why did you need to go there? Couldn't you, with hindsight, you must have thought about it..WENDY MACHANIK: I had no working capital because my deals had ceased, coming to fruition because the bonds were not being granted. It was a terrible time that recession. It was not just South Africa. It was worldwide. Banks were collapsing and banks became very strict as to the lending criteria and the lending criteria is what made them fussy and decide not to lend. We had overheads. I had, I think 13 or 14 branches, and they started to trade at a loss. I had to shut them down in a hurry. I retrenched people. By the end of 2009 and 2010, we were actually profitable again and we could have pulled through and I put every cent back into the Trust Account. I took bonds. I borrowed money. I did whatever I needed to do, to get that Trust Account cleared, which I did. Then this person went and blew the whistle on me..ALEC HOGG: You say that other people were doing the same thing..WENDY MACHANIK: Definitely, some admitted it to me..ALEC HOGG: What about now? What are you doing with your life today because you can't sell real estate anymore?.WENDY MACHANIK: As you know, I can't, by law I can't but what I've done; I've done a complete turnaround. I'm now doing training, coaching, and mentoring. I've teamed up with Doron Geber (at Superstar Strategies) so I feel like I'm coming back. The old Wendy is back..ALEC HOGG: Do you feel like an old Wendy yourself, have you got energy when you get up in the morning?.WENDY MACHANIK: Totally..ALEC HOGG: Are you tap-dancing to work?.WENDY MACHANIK: I can still do my 16 hours a day..ALEC HOGG: What about the fact that your reputation has been so tarnished? How do you ever recoup that? Wouldn't be change your name or go and live somewhere else, perhaps?.WENDY MACHANIK: No, Alec you know, it hasn't bothered me. If I look at my Facebook page, I've probably got about 800 or 900 friends, on Facebook. People know the truth and I think, certainly the clever, intellectual person knows the real, truth behind what happened that it was unfortunate. It was wrong. It was unlawful but it was an unfortunate time in my life and people know that and people know the real Wendy, the Wendy that has this deep integrity, which I do have..ALEC HOGG: But going back, would you not have been better served to have just said, "Okay, that's it.".WENDY MACHANIK: 100 percent, with hindsight, and we are all so clever with hindsight. I should have closed my doors but I had 320 people that I didn't want to put on the street. I really loved my agents passionately, with all my heart and the thought of closing my doors was just horrific. I couldn't contemplate it..ALEC HOGG: When you finally did have your day in Court, there were a lot of people who felt that the sentence that you got, which was no jail time, was too lenient..WENDY MACHANIK: In fact, the sentence was not too lenient. It wasn't dissimilar from the sentence that Oscar got, and I never killed anybody..ALEC HOGG: How do you mean, it was not dissimilar?.WENDY MACHANIK: It wasn't. He was also going to have three years house arrest and there was a jail sentence, which I didn't have to serve because there was no money missing out of my Trust Account, but there was a… I signed a plea-bargain. In that plea-bargain there was also a jail sentence, which could have, (which sat above my head), which could have come to fruition, so it wasn't as dissimilar from his. I think he'll only sit, somebody said he'll only sit ten months on his sentence..ALEC HOGG: From your perspective, you've said that, going back, you wouldn't have taken the money out of the Trust Fund. You would have just closed the business..WENDY MACHANIK: Yes, I would have..ALEC HOGG: That would have broken your heart but that would have been the right thing to do then..WENDY MACHANIK: Correct..ALEC HOGG: What else have you learnt from this experience because it is not everybody, who goes through being on the front pages of the newspapers, everyday, who goes through the kind of battering that you took in the media?.WENDY MACHANIK: I think I've become much more humble. I've learnt to take ego out of every equation of my life and it's brought me closer to people, to my family, to my friends, and to acquaintances..ALEC HOGG: Did you need it?.WENDY MACHANIK: We all need, four our souls, we all need purification, let me put it that way..ALEC HOGG: And this was your lesson?.WENDY MACHANIK: Yes..ALEC HOGG: Even though it was a very harsh one and perhaps, for many people, including Natie Kirsh, who's a great entrepreneur. He says, perhaps not fair…not a fair one..WENDY MACHANIK: He's a wonderful man and, yes, I also believe it wasn't fair..ALEC HOGG: What else have you learnt from all of this, apart from humility?.WENDY MACHANIK: I think compassion. I now understand; I never could understand why anyone would want to commit suicide. I never contemplated it, not once, not ever but I understand why people possibly do it. I understand that it's a…you suddenly realise it is too daunting to go forward and it seemed daunting for me. It took me three years to really resonate and come out of it, and come into my own self again..ALEC HOGG: At the time, there was all this furore around Wendy Machanik, there was also a Rael Levitt. Do you think that somebody somewhere was trying to manipulate, because those are the two icons of (taking yourself out of it) the property industry..WENDY MACHANIK: I know Rael. He's a wonderful man and I feel very sorry for him. I think he was also victimised. I've spoken to so many people, who are in the auctioneering business, and it is very common to have a ghost bidder. They all do it and they all have done it but he was the scapegoat and they used him as an example, the same as they did me..ALEC HOGG: Wendy Machanik, coming back strong. It is lovely to meet with you here, in the Biznews studio and this special Podcast was brought to you by Sanlam Investments.

Fallen property icon Wendy Machanik: What I learnt from the experience

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