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TimesLIVE
a day ago
- Business
- TimesLIVE
About a third of R2.3bn looted from VBS Mutual Bank recovered
Nearly R730m has now been clawed back from the wreckage of VBS Mutual Bank, the South African Reserve Bank's Prudential Authority (PA) said in its latest annual report. A figure confirmed by VBS Mutual Bank liquidator Anoosh Rooplal, this is almost a third of the about R2.3bn plundered through fraud and theft. Advocate Terry Motau's 148-page report — 'VBS Mutual Bank: The Great Bank Heist', released in October 2018 — blew the lid off the looting, leading to 29 criminal cases, with nine matters currently now before the courts. VBS Mutual Bank was placed in final liquidation in November 2018. 'Collection efforts on the loan book are ongoing, with significant progress achieved to date,' the report states. 'The current focus is on securing further recoveries for the benefit of the proven creditors.' Rooplal has already made payments to creditors since taking over the bank's affairs. In 2022, he paid R159m — amounting to 7c in the rand to proven concurrent creditors. In December last year, he paid R458m, which constitutes 20c in the rand. Asked when he will make the next payment, Rooplal said on Monday that it was an ongoing process, 'but the significant dividends have been paid'. The second dividend distribution in December brought the total payments to creditors to R617m, he said at the time. There is no court date yet for the liquidation application of Ithala SOC Limited (Ithala Bank), the PA said in its report. 'The liquidation application is still being ventilated,' the Reserve Bank clarified on Monday. 'The matter will only become ripe for hearing after all parties have filed their respective papers. As such, there has been no communication from the court regarding the outcome of the application.' Lack of co-operation by Ithala In January, the PA filed an application for the provisional liquidation of the entity, alleging that it was unlawfully accepting deposits. Ithala Bank, the Ithala Development Finance Corporation and KwaZulu-Natal's MEC for economic development are opposing the matter. This follows the PA's appointment of a repayment administrator to help transfer the deposits held by Ithala to a registered bank. 'However, the progress was hindered by a lack of interest from registered institutions and co-operation by Ithala,' the PA says in its report. 'The PA and the repayment administrator have since held regular engagements with relevant stakeholders to find a solution for transferring the deposits as quickly as possible in parallel to the liquidation application,' it said. After the PA filed for Ithala's provisional liquidation, the entity's deposit accounts were frozen — according to the Reserve Bank, 'to preserve the funds and prevent it from using depositors' funds for other operational purposes'. But Francois Rodgers, the DA MEC for finance, told Business Times last week that they wanted to interdict the Reserve Bank's liquidation efforts. 'We are in a situation where some depositors have hundreds of thousands that they cannot access due to the liquidation, which is wrong,' he told the paper. Business Day reached out to both Rodgers and his spokesperson but received no response. Business Day previously reported that finance minister Enoch Godongwana approved a R2bn guarantee to Ithala Bank's 223,166 retail depositors. The guarantee would facilitate payments to the depositors by one or more banking institutions to ensure the accounts of depositors can be migrated timeously and funds can be made available. Current risks to the banking sector In her overview, Reserve Bank deputy governor and CEO of the PA Fundi Tshazibana noted that as macroeconomic conditions improved and inflationary pressures subsided, South African banks were likely to see an improvement in their credit risk profiles over the short to medium term. 'However, geopolitical tensions and increased conflicts continue to pose uncertainties and risks to the sector,' she said. 'Globally, there appears to be a growing trend towards deregulation, with an emphasis on reducing capital and other regulatory requirements for banks. As we look ahead, it will be crucial for South African banks to remain vigilant, ensuring strong governance and risk management practices to safeguard the banking system.'
The Citizen
24-06-2025
- Business
- The Citizen
Ithala bank court saga continues
Finance MEC Francois Rodgers welcomed the announcement of a new date for the hearing of the appeal by Johannes Kruger, appointed as South African Reserve Bank (SARB) Repayment Administrator (RA) in the matter involving Ithala bank. The matter is expected to be heard in the Durban division of the KZN High Court on 25 July. ALSO READ: King organises support for troubled Ithala Bank In the Pietermaritzburg division of the High Court in May, Judge Muzi Ncube ruled that Kruger had overstepped his mandate, which relates only to the deposit book and that he had no mandate to take over all other operations of Ithala. Judge Ncube further ruled that Ithala should resume its core business activities, excluding deposit-taking and transacting. This ruling followed court proceedings that were heard in the Labour Court in Durban in March. Undeterred by another court loss, Kruger opted to appeal Judge Ncube's ruling, causing a delay in the resumption of Ithala activities. Rodgers said this was an action that affects KZN's most vulnerable, including pensioners, taxi drivers, SMME owners and domestic workers, among others, whose accounts remain frozen as the alleged attempts of Ithala's systemic collapse persist. 'It appears that the RA, in their actions and instructions, are to the detriment of Ithala's depositors for whom we have been fighting. It is a common cause that Ithala serves a niche market of mainly rural citizens in KZN. Many of Ithala's customers may not find similar services and assistance in the commercial banks,' said the MEC. Rodgers said he was concerned by what appears to be 'fruitless and wasteful' in Kruger's failed litigation attempts. 'We will be submitting a question in the National Assembly to establish how much the RA has been paid by the SARB's Prudential Authority so far, and a quantification of their litigation cost. 'I still maintain that the matter can be resolved amicably by all relevant stakeholders, including National Treasury, if the parties were willing to engage on the matter,' said Rodgers. Don't have the ZO app? Download it to your Android or Apple device here: HAVE YOUR SAY Like our Facebook page and follow us on Twitter. For news straight to your phone invite us: WhatsApp – 060 784 2695 Instagram – zululand_observer At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
The Citizen
20-05-2025
- Business
- The Citizen
Court backs Ithala, but customers say ‘Nothing has changed'
Ithala Bank users remain in limbo despite a recent High Court ruling in favour of Ithala SOC Limited. Customers say little has changed on the ground as they cannot access their funds or resume normal business operations. The Pietermaritzburg High Court ruling, handed down on May 9, interdicted the South African Reserve Bank's appointed repayment administrator, Johannes Kruger, from interfering in the operational management of Ithala. The ruling confirmed that the Ithala board retains full operational authority and that Ithala may carry out all legally permissible transactions, excluding deposit-taking. ABSA Bank was also interdicted from blocking transactions related to salaries and operational expenses. However, for many Ithala clients, the judgment has yet to translate into practical relief. Groutville farmer Zodwa Mthembu said she was devastated to find that she still could not access her accounts even days after the court ruling. 'I went to the Ithala branch in Stanger, and they told me they haven't received the go-ahead to process withdrawals,' said Mthembu. Mthembu, who operates several small businesses through her Ithala accounts, said the shutdown has dealt her a triple blow. 'Since the bank closed shop in January, I've had to survive on personal loans to keep things going. I, too, need rescuing,' she said. Hydroponic farmer and Vella Villa Project founder Mhlengi Ngcobo echoed her concerns, saying that while the legal victory is welcome, the financial damage done over the past few months has been severe. 'We're still in crisis mode. The road to recovery is going to be long and hard. Many of us are small-scale farmers who rely on every cent,' said Ngcobo. Mthembu and Ngcobo are among the 257 000 Ithala depositors left in limbo after the provincial state-owned bank ceased operations in January, after failing to meet banking regulations and financial stability requirements. At least five other farms across iLembe are also affected. Despite operating under special exemptions from the South African Reserve Bank, Ithala never obtained a banking licence and primarily served KwaZulu-Natal residents. A repayment administrator was appointed to manage withdrawals, but legal battles have caused delays, leaving depositors uncertain about how much they will recover and when. KwaZulu-Natal Finance MEC Francois Rodger reiterated his commitment to ensuring the institution is not only protected but restored to full functionality. 'Ithala serves a niche market of mainly rural residents. Attempts to systematically shut it down are short-sighted and demonstrate a total disregard for rural livelihoods,' he said. Rodgers said the Government of Provincial Unity (GPU) will continue engaging with legal counsel to enforce the ruling and support affected communities. Stay in the loop with The North Coast Courier on Facebook, X, Instagram & YouTube for the latest news. Mobile users can join our WhatsApp Broadcast Service here or if you're on desktop, scan the QR code below. At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
IOL News
16-05-2025
- Business
- IOL News
KZN Premier Thami Ntuli calls for backing of Ithala SOC Limited amid banking uncertainties
KZN Premier Thami Ntuli defends Ithala's solvency, despite Treasury's pending R2 billion guarantee and legal uncertainties surrounding its status. Image: Independent Newspapers Archives KwaZulu-Natal Premier Thami Ntuli has called on provincial departments, municipalities, political parties, and businesses to demonstrate their support for Ithala SOC Limited by banking with the institution, but only once it obtains a full banking license. In an interview on Face the Nation, Ntuli clarified recent remarks he made encouraging public entities to transact with Ithala. He stressed that this support must only materialise "when it is fully registered" as a bank under the Banks Act, in line with Section 7.3 of the Municipal Finance Management Act (MFMA), which prohibits municipalities from banking with unregistered institutions. The Premier's remarks come after the Pietermaritzburg High Court ruled that Ithala can continue operations while the Prudential Authority's application to liquidate it is underway. The ruling was seen as a reprieve for the institution, which has long operated under a ministerial exemption rather than a full banking license. Ntuli said the province is committed to ensuring Ithala becomes fully compliant, but he also believes the institution has been unfairly targeted. 'Unfortunately, the pass of a new act compelled that the issue of any bank has to, in fact, meet some compliant areas of which Ithala has met most of them,' he said. He also addressed public concern over the safety of deposits in Ithala, stating, 'We are giving assurance that the people's money is safe and they will get their money from Ithala. It has an excess of cash of more than R300 million.' Yet, questions remain about why the bank still requires a guarantee from National Treasury if it is indeed solvent. When asked, Ntuli acknowledged the complexity: 'It is too technical, maybe even for me,when you talk about the guarantee, you talk about something which is much more technical on the side of other aspects of the bank.' Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ National Treasury had earlier indicated it was working on a R2 billion guarantee for Ithala's depositors, contingent on a technical process that has yet to be finalised. Ntuli confirmed the KZN government had engaged Treasury on the guarantee: 'We engaged the Treasury so that we, in fact, appealed for the guarantee and we were in agreement, but we've seen a letter suggesting otherwise.' He emphasised Ithala's importance to the provincial economy.'This bank has 38 branches which are in rural communities and township communities, when we fail to preserve it, that will mean the people who are living in rural communities and in township, might be deprived of an opportunity of seeing their economy also growing.' Get your news on the go, click here to join the IOL News WhatsApp channel. IOL Politics
IOL News
14-05-2025
- Business
- IOL News
Understanding the Banks Act exemption: MEC Zondi's insights on Ithala
KwaZulu-Natal Economic Development, Tourism and Environmental Affairs (Edtea) MEC Reverend Musa Zondi. Image: Sibonelo Ngcobo/ Independent Newspapers KwaZulu-Natal Economic Development, Tourism and Environmental Affairs (Edtea) MEC Reverend Musa Zondi has discussed issues surrounding the Banks Act exemption and the banking licence and how these affect Ithala SOC Limited. Zondi discussed the two topics during a media briefing called by the KZN government, led by Premier Thamsanqa Ntuli. Ithala SOC Limited CEO Dr Thulani Vilakazi was also present. Zondi explained that there is a provision in the Banks Act for an exemption to be granted to certain institutions, such as Ithala SOC, to operate as a fully-fledged bank without having to acquire a banking licence. 'That has been the case from day one until the powers that be decided that they were no longer going to grant it,' Zondi said. 'Denying extending the exemption to Ithala SOC may as well cause an amendment to the Banks Act to do away with the exemption regime.' Zondi said they are making Ithala operational because they are working within the law governing the banks in South Africa. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ He said he has been a parliamentarian since 1994, and from 1994, there has been a persistent call from parliamentarians that a state bank should be established. 'There has been no success to date. Ithala is the only, if you like, existing state bank which has been successful,' Zondi said. 'So why kill something that is already successful?' On Ithala's acquisition of a banking licence, Zondi explained that the reason they needed to acquire a banking licence is to comply with the current situation where the Prudential Authority has withdrawn the bank's ability to operate. 'As parliamentarians, when we drafted that Act we drafted it with state institutions like the land bank and others (in mind), will they need a commercial licence, do you need to privatise them. No, you don't need to privatise them and therefore that exemption clause was put in there,' Zondi said.
