Sunday World reports that amid the decision by the SA Reserve Bank’s Prudential Authority for the provisional liquidation of Ithala SOC Limited, the Kwazulu-Natal (KZN) government is racing against time to save the entity.
The Prudential Authority (PA) last week filed court papers to set the move in motion. If the Pietermaritzburg High Court gives the green light, it will enable the appointment of a liquidator. The liquidator will in turn would utilise the insolvency legislation to recover and distribute the funds of about 257,000 depositors of the state-owned financial and insurance provider. The decision was triggered by Johannes Kruger, a repayment administrator appointed by the PA, who said the entity was legally and technically insolvent. But, according to Cosatu in KZN, it appeared there was a concerted effort to do away with financial institutions geared towards assisting those in the economic periphery. “We are very much disappointed as Cosatu in KZN. Ithala is one of the very few banks that look after the financial needs of the poor and the marginalised. Our view is that the Reserve Bank should be supporting institutions such as Ithala. It’s clear that there is an agenda to monopolise the financial sector,” Cosatu KZN’s Edwin Mkhize said. He pointed out that there might be issues about how Ithala ran its affairs but it should not be allowed to collapse. Cosatu said the move would affect close to 400 employees. Francois Rodgers, the finance MEC in KZN, advised that the KZN treasury supported the recent move by Ithala to challenge the court action. Ithala has filed an urgent interdict to stop the PA in its tracks. Ithala was established in 1958 as a development finance agency owned by the former Kwazulu homeland administration.
- Read the full original of the report in the above regard by Sandile Motha on page 12 of Sunday World of 19 January 2025
- Read too, Ithala pushes back against ‘flawed’ liquidation bid, at BusinessLive (subscriber access only)
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