A full bench of the Durban High Court has ruled that the board of the KwaZulu-Natal development entity, Ithala, does not have control over its bank accounts to pay salaries, South African Social Security Agency (Sassa) grants, and service providers.

This is pending an appeal against a ruling of Judge Muzi Ncube on the powers of the repayment administrator.

The South African Reserve Bank’s Prudential Authority appointed a repayment administrator last year after Ithala continued to take deposits from the public, despite the fact that their exemption from the Bank Act lapsed at the end of 2023.

The administrator Johannes Kruger froze Ithala’s bank accounts in January after the Prudential Authority filed for Ithala’s liquidation.

Kruger is tasked with repaying people who opened normal bank accounts with Ithala.

However, the freezing of Ithala’s bank accounts means that it cannot pay staff, social grants to Sassa beneficiaries, or their service providers.

Ithala’s lawyers have argued that the entity will go under unless they are able to perform these functions.

The judges ordered that any money Ithala receives must be managed by Kruger.

While the judges ruled that Kruger’s powers are limited to the repayment of deposits to the public, they have ordered Ithala to cooperate with Kruger in drawing up a repayment plan.