An accountant who is an expert in auditing financial statements has poured cold water on the claim that Itha-la SOC Limited is insolvent and thus has to be liquidated.
Eugene Msawenkosi Zu-ngu, chairperson of the Zungu Investment Company (Zico), contends in an affidavit that the opinion of Johannes Kruger, an appointed payment admini-strator at Prudential Authority (PA), had been formed based
on assumptions.
“Mr Kruger’s methodology in assessing technical insolvency is incorrect to the extent that he has relied on scenarios and assumptions such as the winding up prepared by the CFO.
“The financial statements use approved financial reporting standards in determining the fair value and realizable value of the entity’s assets. Whereas the wind-up report was prepared based on assumptions (and unaudited figures). Hence to determine if Ithala is technically insolvent, the most recent audited financial statements ought to be used,” Zungu said in his affidavit deposed to at the Pieterma-ritzburg High Court.
He further stated that as of March 31 last year, Ithala’s assets exceeded its liabilities by R354-million.
“This is evident in the 2024 audited financial statement issued by the Auditor-General of South Africa. If Ithala was technically insolvent, the auditors would not have issued the audited statements on a going-concern basis,” he further revealed.
Zungu filed the affidavit this week, where Ithala is battling the move to place it under liquidation. In his affidavit, Zungu supports Ithala’s claim that the decision to temporarily freeze its operations pending the court matter is sinister.
He also mentioned in his sworn statement that his conclusion is that its house is in order.
Ithala, the government-owned entity based in KwaZulu-Natal, faces an uncertain future in the aftermath of the PA’s decision to file papers in court requesting for the entity to be liquidated.
The PA is the South African Reserve Bank’s wing dealing with compliance of financial institutions. If the PA is successful in its court bid, it will mean Ithala has to close shop. The court’s showdown also puts in a precarious position more than 250 000 depositors who have struggled to access their funds.
Cosatu on Saturday bemoaned Ithala’s posture amid the fracas, saying they should come clean.
“As much as we support them in their struggles, they should come clean and not send conflicting messages to their clients. We have throngs of workers who are worried about their money kept in Ithala bank. There seems to be a veil of secrecy on the side of Ithala,” Cosatu general secretary in KwaZulu-Natal Edwin Mkhize told Sunday World.
