THE FUTURE of Ithala Bank hangs in the balance as its legal team prepares for a critical meeting with Judge Muzikawukhelwana Ncube today, amid rising tensions over the bank's impending liquidation.
Operating under an exemption from having a banking licence, Ithala's status is now in jeopardy after its licence exemption expired on December 15, 2023. Despite efforts to secure a full banking licence in 2016 and again in 2023, both applications were declined by the Prudential Authority (PA), leading to an escalating legal standoff.
KwaZulu-Natal Premier Thamsanqa Ntuli, alongside the MEC for Economic Development, Reverend Musa Zondi, provided updates on the ongoing legal confrontations during a recent media briefing in Durban yesterday.
The provincial government, backed by Ithala Bank’s legal team, had initially sought the Pietermaritzburg High Court's intervention in an urgent application, scheduled for yesterday.
However, due to Judge Ncube being on leave until 17 February 2025, the case was delayed.
“A meeting has been scheduled with senior counsel representing all parties involved to discuss the way forward for this case,” Premier Ntuli announced.
He further noted the urgent nature of the situation, especially with the looming liquidation application set for tomorrow (Thursday).
“The effect of these developments is that the urgent application set for today will no longer proceed,” Ntuli said.
He also highlighted the pressing nature of the bank's situation.
Amid this turmoil, Finance MEC Francois Rodgers – who also leads the DA in KZN – has filed opposing legal papers ahead of two significant court hearings over the bank's future.
The urgent application calls for enforcement of Judge Ncube’s previous orders, which permit the Ithala Board to manage its operations and bank accounts independently.
Last year, Judge Ncube compelled the Repayment Administrator, Johan Kruger, to reassign control of Ithala's non-banking assets back to the bank.
However, the situation escalated when the PA filed for provisional liquidation two weeks ago, claiming it would be in the best interest of approximately 257000 depositors.
The PA argues that a liquidator could effectively recover and distribute funds under insolvency legislation.
Rodgers was vocal against the repayment administrator's decisions, slamming Kruger’s conduct as detrimental to the bank's staff, clients, and depositors.
“His callous actions have placed countless SASSA beneficiaries at risk and could exacerbate the province’s already challenging unemployment and poverty levels,” Rodgers remarked, condemning Kruger’s refusal to authorise salary payments for Ithala’s employees for February.
“This demonstrates a lack of care for people’s livelihoods,” he added.
WhatsApp your views on this: 071 485 7995
DAILY NEWS