KZN Treasury moves to secure Ithala’s future after reported liquidation withdrawal

The KwaZulu-Natal Treasury has called for a meeting involving all key stakeholders, including national and provincial authorities, regulators and Ithala representatives, to address outstanding issues, clarify the way forward and explore measures to preserve the value that remains within Ithala Bank.

This comes after reports that the Prudential Authority

has withdrawn its application to liquidate Ithala SOC Limited.

In a statement issued by the KZN Treasury on Tuesday, the department said a legal team has been tasked with assessing the veracity of the reports but -- and if confirmed -- KwaZulu-Natal Finance MEC Francois Rodgers said the development will represent an important step towards finding a sustainable solution for Ithala, which has played a critical role in advancing financial inclusion and economic development in the province.

Rodgers has consistently opposed the liquidation application, a position shared by senior leaders within the Provincial Government, who have long argued that any intervention affecting Ithala must support the institution's ability to regain control of its core assets and revenue streams in order to meet its financial obligations and secure its long-term sustainability.

“While this will be an important development, the key issue that now requires urgent attention is Ithala's ability to regain control of its loan book. We remain concerned that these assets, which are critical to the institution's viability, should not be under the control of the Repayment Administrator.

“Ithala requires access to its loan portfolio and the proceeds from its insurance businesses if it is to meet its financial obligations and chart a sustainable path forward,” Rodgers said.

Rodgers also expressed concern regarding the continued involvement of the Repayment Administrator Johan Kruger, noting that Ithala's recovery efforts should focus on restoring the institution’s operational capacity and ensuring it can effectively utilise its assets and revenue streams.

“It is our considered view that the current arrangement has not advanced the objective of restoring Ithala to financial stability. The priority now must be to ensure that Ithala has control over the assets and revenue streams necessary for its operations, including its loan book and insurance proceeds. This is essential to rebuilding confidence, meeting obligations and securing the institution's future,” the MEC said. – SAnews.gov.za