The legal team of Ithala SOC Limited has argued in the Labour Court in Durban that freezing the bank’s accounts was a deliberate systematic collapse of the bank.

This emerged in court during the application for leave to appeal brought by the Repayment Administrator on behalf of the Prudential Authority of the South African Reserve Bank.

Since 16 January, over R250 000 Ithala clients have not been able to withdraw or deposit funds.

Ithala’s representative, Advocate Sandile Khumalo, wants the court to grant extended orders allowing the company to continue operating as normal pending the outcome of the application for provisional liquidation.

“They have decided to be a law unto themselves and continued as if there are no legal proceedings pending. What makes their conduct even worse is that we are not dealing with a review that is coming, we are dealing with a declarator that has already been given by your Lordship which is clear and was carefully crafted after a full argument. And my Lord will remember that they had an application that they can take control of all the assets of Ithala. My Lord that application was reviewed, and you dismissed it.”

Judgment reserved 

Judgment has been reserved in the Prudential Authority’s (PA) provisional liquidation application against Ithala SOC Limited. The PA, a regulator under the South African Reserve Bank, states in its arguments that it had warned Ithala to ring-fence deposits rather than combining and withdrawing them.

 

KwaZulu-Natal Finance MEC Francois Rogers says the challenges facing Ithala Bank were inherited by the government of provincial unity.

“This is the challenge that has been inherited by the new administration, this is not something we created but inherited. I have coordinated a meeting in September last year and we were trying to come up with solutions and a way forward and that meeting was just a meeting about the RA telling me how corrupt how much fraud and how many people politically connected have gotten loans with Ithala but when I asked for evidence, I was told they can’t give me evidence, for what reason, I don’t know.”

VIDEO | Regulatory framework was on the spotlight at the Ithala Bank case:

Meanwhile, Etienne Theron, attorney for the Repayment Administrator blames Ithala for what he says is the bank’s failure to comply with the statute.

“The complaint is we’re not allowing money in and it was deliberately done to ensure that SASSA money was not caught up in the net and become the subject of a dispute between the parties. Yes, of course, my Lord, repayment of loans and the like is a consequence and that is true for salaries too. They can go to another bank for salaries, they can find themselves another conduit. So, my learned friend is going to reply, that is the structure of Ithala and it means that we’re trying to kill it.”