The Oranjekas cooperative bank for Afrikaners in Pretoria is facing final liquidation if it cannot mount a believable legal submission to the high court no later than tomorrow.
This is after the bank was placed on provisional liquidation by Acting Judge for the Pretoria High Court, Advocate Mark Morgan last month.
The order came after the SA Reserve Bank’s (SARB) Prudential Authority (PA) approached the court for the liquidation of the bank, citing widespread collapse of governance and chronic non-compliance.
It its founding affidavit, the Prudential Authority argued that Oranjekas had reached a point of no return and could not be saved after several attempts to save it from sinking had drawn a blank over several years since 2021.
Beyond help
Even attempts by the Reserve Bank to babysit the sinking ship could not work as it continued to slide into the abyss with each year that passed.
Consequently, the Authority decided the only way was to go for liquidation in the interest of the bank itself and its depositors.
The bank, similar to the now defunct VBS Mutual Bank and embattled Ithala, takes deposits and issues loans to customers of Afrikaner origin.
“The Authority seeks the winding up of Oranjekas principally because it is factually and commercially insolvent and unable to pay its debts,” reads the founding affidavit by the Authority.
“There is no reasonable probability, given the number of indulgences granted by the Authority to it over an extended period, that it will be able to pay its debts as and when they become due, or that it will become a viable cooperative.
“It appears just and equitable to liquidate Oranjekas because it has continued to fail to comply with its regulatory reporting requirements,” the Authority goes on.
“It suffers from poor corporate governance (internal conflicts) and operational failures, and its previous auditors have expressed concerns about the completeness, accuracy, and reliability of the financial information provided to them for the 2024 financial year audit and were thus unable to provide a going concern statement.”
Ruled out
Attempts to have the matter heard in secret to shield the shenanigans of Oranjekas board of directors were rejected by Acting Judge Morgan who instructed that the matter be heard in open court in line with the constitutional principles espoused in section 34.
Consequently, on July 8 Judge Morgan ruled that “Oranjekas is hereby placed under provisional winding up. Mr Zaheer Cassim is hereby appointed as the provisional liquidator of Oranjekas.
“Should the respondent or any other interested party wish to oppose or support the final winding up of Oranjekas, such party must, by 12 August 2025, file their respective affidavit with the Registrar of the Court and serve copies to the Authority’s attorneys, Werkmans Attorneys.”
On September 16, the court will sit to hear arguments pro and against the final winding up of the troubled Oranjekas.
The tail wagging the dog
Among other transgressions that placed the Afrikaner bank in its current position include its bizarre request, in June last year, to the Reserve Bank to grant them permission to accept a new client’s deposit, totaling R30 million for a fixed deposit term of 5 years.
The bank had asked SARB to do this on the condition that the Authority provide a written undertaking not to take adverse actions against it within the next 12 months with specific reference to liquidating or putting it under administration.
“On 23 July 2024, the Authority declined this request because it was not within its mandate to provide such a written undertaking,” the PA told the court.
“On 13 November 2024, the Authority requested Oranjekas to address certain queries and provide information relating to its financial soundness. Oranjekas failed to provide such clarity or information.”
When the PA made attempts to meet the leadership of Oranjekas Bank, they were sent from pillar to post with goalposts changing at every turn.
Steep decline
Instead, the Oranjekas bank board of directors started resigning like dominoes falling.
Oranjekas had also stopped sending weekly reports to the Reserve Bank, sounding alarm bells that things were falling apart and that leadership was running away from accountability.
In September last year, the SARB received Oranjekas financial reports for the financial year ending February 2024. They were a disaster. The capital adequacy ratio (CAR) was at minus (- 49,8%), markedly far below the minimum required level of 6%; the solvency ratio stood at 67.22% below the minimum required level of at least 100%.
The delinquency ratio was recorded at 18% which was above the maximum allowable threshold of 5%; whilst the savings/deposits to total assets ratio stood at 148%, almost twice above the maximum allowable threshold of 80%.
By February this year, the situation had only worsened.
“Oranjekas’ dysfunctional corporate governance and deteriorating liquidity and solvency have reached a point where the interests of the members and the public warrant this urgent intervention,” the Reserve Bank told the High Court.
