How Ithala SOC aims to drive economic growth in KwaZulu-Natal despite legal hurdles

KwaZulu-Natal Premier, Thamsanqa Ntuli, has described Ithala SOC as a key institution and beacon of hope in advancing economic transformation and promoting inclusive growth.

Ntuli held a meeting on Tuesday to provide an update on recent developments involving Ithala SOC. He highlighted the steps undertaken by the Department of Economic Development, Tourism, and Environmental Affairs (EDTEA) to ensure Ithala’s continued service to the people of KwaZulu-Natal.

Ntuli said Ithala SOC remains a strategic partner for the KZN Provincial Government.

Ntuli reaffirmed the administration’s commitment to strengthening its partnership with Ithala, a relationship that has been a cornerstone of provincial development initiatives under successive administrations.

Ntuli said that Ithala is the province’s primary banking partner, as well as initiatives aimed at enhancing its operational capacity to meet the needs of citizens and drive sustainable development.

Ntuli outlined the provincial government’s continued efforts to ensure Ithala SOC remains a cornerstone of economic growth and service delivery in KwaZulu-Natal.

Ithala Bank, a 60-year-old banking institute, is entangled in a legal battle as it fights to avoid liquidation, which the Prudential Authority (PA) of the South African Reserve Bank (SARB) deems imminent.

The PA has cited various reasons to justify the stance it has taken, including Ithala incurring over R500 million in losses and breaching the Banks Act and the Financial Advisory and Intermediary Act.

The EDTEA provided a breakdown of the court proceedings:

1. On 23 January 2025, the department and Ithala SOC, through their lawyers, submitted a request for Justice Ncube to preside over the urgent application regarding Ithala SOC matters, initially set for hearing on 28 January 2025. However, the Registrar of the Pietermaritzburg High Court advised that Justice Ncube is currently on leave and will only resume duty on 17 February 2025.

• Following this, the department approached the Judge President to allocate another judge for the hearing. The Judge President issued a directive for the matter to be removed from the court roll. Additionally, a meeting has been scheduled for Wednesday, 29 January 2025, with the parties’ respective senior counsel to discuss the way forward.
• As a result, the urgent application will no longer proceed on 28 January 2025. However, the liquidation application remains scheduled for 30 January 2025, and the registrar will inform the department’s and Ithala SOC’s lawyers as soon as the Judge President makes a further determination on this matter.

Finance MEC Francois Rodgers stated that as of October 31, 2024, Ithala’s total assets amounted to R3.25 billion, while total liabilities amounted to R2.93bn. This means that Ithala’s assets exceeded its liabilities by R316m.

zainul.dawood@inl.co.za

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