MEC Zondi challenges ANC's claims on Ithala Bank customers

KwaZulu-Natal Economic Development and Tourism MEC Reverend Musa Zondi has accused the ANC in the province of misleading the financially constrained Ithala Bank customers for political point scoring.

Reverend Zondi was reacting to the ANC's claim that it had won a significant victory for bank customers — namely, that the bank would no longer be liquidated and that customers would soon be able to access their frozen funds.

In a media briefing on Tuesday, the party stated that it successfully convinced Finance Minister Enoch Godongwana to guarantee all depositors.

Initially, the minister had agreed to guarantee depositors up to R100,000. The party said this meant that the Prudential Authority (PA) had been removed from the bank's administration, and a liquidation case was off the table.

However, this was dismissed by Zondi as a lie and political point-scoring by the ANC.

Zondi said that as the main shareholder in the bank, the provincial government knew nothing about what the ANC had told the public, and urged the party to refrain from playing with the feelings of the distraught Ithala Bank customers.

In his report to the Cabinet on Wednesday, he said that the PA had appealed the recent Pietermaritzburg High Court judgment, which declared that the bank could restart operations without requiring new deposits, which was the reason why the bank's customers had yet to access their money.

“As the KwaZulu-Natal government and as a line manager for Ithala, we know nothing about the so-called groundbreaking agreement between the ANC and the Finance Minister about saving the bank from liquidation. We wish to inform Ithala Bank customers that the matter is still in court and has no new communication from either the Minister or the PA about the matter,” said Zondi.

He called on the ANC to show Ithala Bank customers proof of a banking licence or exemption certificate, which he said are the key things that are required by the bank to resume its operations like before.

“The MEC said there are about R3.2 billion of depositors, which are held by the PA.

“Has the PA issued a new exemption certificate or banking licence to Ithala Bank? Has the PA withdrawn its liquidation case in the Supreme Court of Appeal? The ANC must answer these questions,” said Zondi.

ANC spokesperson Fanle Sibisi had asked to be sent questions earlier in the day, but has yet to respond to those questions.

The bank was in a protracted legal battle with the SA Reserve Bank’s PA, which had filed for provisional liquidation in the Pietermaritzburg High Court.

The PA argued that the bank was not complying with financial regulations, which included that it was operating as a bank without a banking licence. This was after the PA had not renewed Ithala’s exemption certificate, which allowed it to operate without requiring a banking licence.

willem.phungula@inl.co.za