KwaZulu-Natal Economic Development, Tourism and Environmental Affairs MEC Reverend Musa Zondi has accused giant ‘white owned commercial banks’ of hatching a plot to shut down black-owned Ithala bank.
Speaking on SABC radio on Sunday morning, Zondi said the plot was about 257, 000 customers of Ithala, which the ‘white banks’ desperately needed. The MEC denied that Ithala was insolvent, saying it was given a clean bill of health by the Auditor-General who gave the bank a clean audit for the financial year ending 31 March last year. Furthermore, the MEC said the 60-year-old bank’s assets exceed liabilities, reinforcing its financial stability which is a confirmation that depositors’ funds are safe.
“We suspect a third hand in all this. We know that white banks want to take 257, 000 Ithala clients, so this is a plot to destroy a black owned bank,” said the MEC.
He added that when President Cyril Ramaphosa attended an Imbizo in Durban late last year, he briefed Ramaphosa about this in front of Finance Minister Enoch Godongwana who promised to speak to the Prudential Authority to stop what it is doing.
The Prudential Authority has filed papers in the Pietermaritzburg High Court for a provisional liquidation citing non-compliance, however Ithala and provincial government have filed opposing papers. The matter is scheduled for Friday.
Zondi said that the Prudential Authority lost a similar case last month and does not understand what new evidence it has to re-apply for another liquidation attempt. On Friday bank clients were unable to access their funds, which the MEC also condemned.
“It is important to note that the court has not made a ruling on the merits of the case. Ithala filed an urgent interdict to challenge the directives issued by the Repayment Administrator (RA), which includes halting deposits and withdrawals. However, the court declined to grant the interdict, citing the imminent court hearing scheduled for next week Friday, the 24th of January 2025.
“This decision leaves Ithala in a precarious position, as clients will not have access to their funds, particularly during the weekend when many citizens face pressing financial obligations such as funerals, weddings, medical expenses and the opening of schools,” said Zondi.
Attempts to get comments from both the Prudential Authority and the commercial banks about the accusations were unsuccessful.