Opposition parties call for probe into Ithala loan

Johannesburg – Pressure is mounting on Ithala Bank to account for more than R3.4-million that was diverted from the bank to foot the legal bill of former president Jacob Zuma’s 2005 arms deal court challenge.

The money was also used to renovate the house in Forest Town, Joburg, which he occupied after he was dismissed as deputy president by his predecessor, Thabo Mbeki.

Opposition parties in Kwa- Zulu-Natal this week came out guns blazing, saying those who facilitated the transfer of the funds must face the law for using Ithala, an entity owned by the KwaZulu-Natal government, as their piggy bank.

Sunday World reported last week on how millions of rand were transferred from Ithala to pay Zuma’s lawyers during the arms deal court case.

The money was allegedly disguised as a business loan to Hola Recruitment Services, owned by former ANC MP Sizani Dlamini-Dubazana.

Dlamini-Dubazana alleges in her affidavit that Health Minister Zweli Mkhize was a key mover in facilitating the loan during his tenure as MEC for economic development in the province.

She further claimed Mkhize instructed her to use her company to solicit the loan to cater for Zuma’s exorbitant legal costs and renovations to the house Zuma rented from her in Forest Town, Johannesburg.

The IFP, which is the official opposition in the KZN legislature, has called for a full-scale forensic investigation.

“Ithala continues to be a cash cow for the elites and the law-enforcement agencies have not done justice in pursuing investigations for the purpose of bringing all these matters to a logical legal conclusion. We are calling the law-enforcement agencies and whistleblowers to also come forward to report on these matters. These allegations must go through a proper judicial process,” said IFP spokesperson Mkhuleko Hlengwa.

He said both Mkhize and Zuma must be brought to book and answer for the allegations against them.

Heinz de Boer, the DA’s spokesperson on the economic development portfolio, said the party had decided to formally ask MEC for economic development and tourism Ravi Pillay to explain what his department has done about these allegations.

The Ithala Development Finance Corporation (IDFC) is under the department.

“Government banks are generally bad news because they are often used by politicians to launder money. Ithala Bank is a classic example of this. We are constantly receiving confidential information about a lot of entities associated with the economic development and tourism portfolio. We are doing our own investigations on these issues,” said De Boer.

The EFF said the special investigating unit must immediately act on the allegations.

“In addition, the EFF will also open a case of corruption and fraud emanating from these allegations. There must be consequences to both the management who authorised the loan, as well as for politicians who are alleged to be involved,” said Vusi Khoza, EFF KZN chairperson.

Ithala’s group reputation manager Sitandiwe Dimba said Hola had met its criteria.

“The reason for the loan application, which is expansion of the business, also fell in line with the funding mandate of the IDFC. The IDFC expects all our applicants to act in good faith by ensuring that they utilise the funds for the purpose they applied for, plus servicing the debt given.”

Department of economic development spokesperson Bheki Mbanjwa said information provided by Ithala showed no evidence to suggest the entity was aware of any other purpose for the loan beyond that stated by the applicant.

“Now that there are allegations which are in the public domain, as the shareholder department we expect that it will be subjected to the entity’s internal audit processes which may also lead to external auditing by the auditor-general,” he said.

Mkhize is also embroiled in an unfolding scandal where his close associates and son are said to have benefitted from an irregular contract awarded by the Department of Health.

The Daily Maverick has reported that Digital Vibes, a communications firm at the centre of an alleged corruption storm involving a R150-million contract, paid R300 000 to Mkhize’s son, Dedani.

Earlier this week, Mkhize said an investigation had found the contract between Digital Vibes and the Health Department was irregular. Digital Vibes is linked to Mkhize’s former assistant, Tahera Mathera and former spokesperson Naardhira Mitha.

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