Ithala set to remain a risk

Johann Krog, MPP

DA KZN Spokesperson on Economic Affairs and Tourism

The Democratic Alliance has today called on KZN ECOD MEC, Mike Mabuyakhulu to ensure that adequate recapitalisation, in line with the Banking Act, is put in place to safeguard ordinary citizens with either loans or deposits with Ithala.

Amendments to the Ithala Act were today passed by a majority vote within the provincial legislature. The changes mean that that any person with an interest may bring an application of liquidation against Ithala and that this is no longer the sole preserve of provincial and national government.

The MEC received a directive from the then Finance Minister, Trevor Manuel 10 years ago, requesting that the amendment be made. The matter has dragged on so long that today’s sitting is a crisis step to prevent Ithala from ceasing to operate. The MEC has dragged his heels abominably. There is no reason why the matter could not have been addressed within the normal legislative programme within the past five years since the MEC took over. He has failed to accept responsibility for this task but has had the grace to apologise for this oversight.

The DA will request that the Auditor-General investigate whether convening a special sitting of parliament today was fruitless expenditure and whether the MEC is responsible for the costs thereof.

With the national treasury now released from securing Ithala, it is even more important to recapitalise and restructure the entity. Ithala remains a concern. At the recent public hearings people were heard asking whether their deposits were safe. The DA believes that their concerns are warranted. Ithala is written off approximately R300 million in the recent financial year and has previously written off R300 million in bad debt. It received a qualified audit from the A-G. Its IT systems are in disarray. Its SCM systems are questionable. Rumours that the President’s son is being sued for breach of payment on a R5.5million loan also require investigation. It is pertinent that all loans to politicians are disclosed to the ECOD portfolio committee within the province.

Proper security needs to be obtained for loans and the liquidity of Ithala must be increased. These are urgent matters that the MEC must address.

Leave a Reply

Your email address will not be published. Required fields are marked *