Embattled KwaZulu-Natal government-owned entity Ithala Bank has again found itself under scrutiny.
This time, the Special Investigating Unit (SIU) has been given [the green light by President Cyril Ramaphosa to conduct a full-scale investigation into its financial affairs.
The entity’s lthala Development Finance Corporation and its subsidiary lthala (SOC) Limited will be the subject of the probe.
Serious maladministration by officials
Among the SIU’s terms of reference include investigating, as contemplated, any alleged serious maladministration in connection with the affairs of the corporation and improper or unlawful conduct by officials or employees of the corporation.
“This includes unlawful appropriation or expenditure of public money or property, unlawful, irregular, or unapproved acquisitive act, transaction, measure or practice having a bearing upon state property, intentional or negligent loss of public money or damage to public property,” reads the proclamation in part.
At the heart of the investigation are the allegations of serious maladministration. It will focus on the tendering for the supply, implementation and maintenance of an integrated banking solution. The SIU said on Tuesday the probe will determine if contract payments adhered to National Treasury guidelines. Also whether they led to any financial losses for the department or state.
Improper benefits
“The SIU will investigate any unlawful conduct by Ithala employees or officials that may have resulted in improper benefits.
“Furthermore, the investigation will assess whether fraudulent actions occurred. It will identify any resultant losses or damages, and examine any irregular or unlawful behaviour by Ithala employees of other entities,” it said.
According to the statutory body, the probe covers allegations of improper conduct occurred between January 1 2017 and January 31 2025, as well as any related activities before January 1 2017 and after the date of the proclamation that are pertinent to the matters under investigation.
SARB application for Ithala’s liquidation
The SIU probe comes hot on the heels of the South African Reserve Bank (SARB) wing Prudential Authority (PA) making an urgent application at the Pietermaritzburg High Court wanting the Ithala SOC limited to be liquidated. Johannes Kruger, PA’ payment administrator responsible for scrutinising Ithala’s affairs, said the entity had slipped into technical insolvency.
But Ithala, which has struggled for decades to attain a permanent banking licence, has hit back. It said Kruger’s decision was sponsored by major banks, who want Ithala to close its doors. About 270, 000 bank’s depositors are currently in limbo following the court’s action. Political parties are also throwing their weight behind Ithala’s fight for survival.
