Trouble-ridden KwaZulu-Natal-based entity Ithala lives to fight for another day.
The entity, which operates as Ithala Bank, faces an uncertain future and the possibility of permanently closing shop.
This comes after the Reserve Bank’s wing, the Prudential Authority (PA), filed a court application asking for green light to liquidate Ithala.
The matter convened on Monday at the Durban Labour Court, where PA’s repayment administrator Johan Kruger sought to appeal a November court decision.
The PA had wanted a court’s declaration to take over Ithala’s assets but lost the bid.
“They have decided to be a law unto themselves and continue as if there are no legal proceedings pending. What makes their conduct even worse is that we’re not dealing with a review that is coming, argued Ithala’s legal representative, advocate Sandile Khumalo.
“We’re dealing with a declarator that has already been given by your lordship, which was carefully crafted after a full argument. That application was reviewed, and you dismissed it.”
Technical insolvent
Kruger, a key figure in the Ithala versus PA showdown, had wanted to take over the operations of Ithala in 2024, but the court thwarted the move.
The court ruled at the time that Kruger had overstepped his powers.
Khumalo also pointed out that the relentless bid by the PA to liquidate Ithala was a systematic collapse of the Ithala Bank.
In January, Kruger declared the entity, which falls under the province’s department of economic development, tourism, and environmental affairs, technical insolvent.
He further said that the bank’s over 250 000 depositors were at risk of losing their money, which they had kept at the bank.
The PA subsequently filed for a provisional liquidation, saying the move will ensure that the bank does not collapse with its clients’ money.
This resulted in the freezing of all accounts attached to Ithala, causing untold financial suffering to its clients.
These include the SA Social Security Agency beneficiaries, small business owners, workers’ salaries, and those involved in the school feeding scheme.
Judgment reserved
The PA, however, fired back, saying Ithala was suffering from self-inflicted wounds.
“The repayment of loans and the like is a consequence, and that is true for salaries too,” Etienne Theron submitted on behalf of the PA.
They can go to another bank for salaries; they can find themselves another conduit. So, my learned friend is going to reply, that that is the structure of Ithala, and it means that we’re trying to kill it.”
Presiding judge Ncube reserved judgement on the matter.
Ithala, on the other hand, supported by the provincial government, has denied claims of insolvency citing sinister
“We need to find a solution within the legislative framework that is in the best interest of the province and the depositors of Ithala,” explained Francois Rodgers, who attended Monday’s court proceedings.
