The KwaZulu-Natal treasury is gearing up to help Ithala Bank thwart the provisional liquidation application launched against it.
Last week the repayment administrator, acting under the auspices of the Prudential Authority (PA) of the SA Reserve Bank, filed papers in the high court in Pietermaritzburg for the financial entity’s provisional liquidation.
The PA — responsible for the prudential regulation of banks and insurance companies — said it believed the move was in the best interests of Ithala’s about 257,000 depositors, as the appointed liquidator would be able to use insolvency legislation to recover and distribute their funds where possible.
The provincial treasury said, however, that contrary to the claims of repayment administrator Johannes Kruger Ithala did not have a solvency problem.
It said up to October 31 Ithala’s total assets amounted to R3.25bn and total liabilities were R2.93bn, so its assets exceeded liabilities by R316m.
The provincial treasury plans to further demonstrate Ithala’s functionality when the matter was heard in the high court on Tuesday.
KwaZulu-Natal finance MEC Francois Rodgers said: “It is KwaZulu-Natal treasury’s contention Johannes Kruger has not acted in the best interests of Ithala’s depositors, workers, suppliers and clients. In fact, the callous action of Mr Kruger has placed at risk countless Sassa beneficiaries and sets out to worsen the concerning high unemployment and poverty rate in the province.
“We are further aggrieved to learn that Mr Kruger does not want the entity to pay the February salaries of Ithala staff members. This demonstrates a lack of care for people’s livelihoods.
“Ithala is a relevant institution in the mission of the government of provincial unity (GPU) to build a capable, ethical and developmental state. The entity offers essential financial and nonfinancial support to many small and informal businesses that provide jobs, particularly in rural and other communities, that are not typically supported by commercial financial institutions.
“The GPU is, therefore, determined to ensure that the entity receives the necessary support for its survival.”
TimesLIVE
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