KwaZulu-Natal Finance MEC Francois Rodgers has called on the National Treasury to expedite the financial guarantee to Ithala bank, or explain the causes behind the delays.
The matter was the subject of a heated debate between Repayment Administrator (RA) Johan Kruger’s legal team and that of Ithala bank during the court proceedings on Monday in Durban. Ithala had launched a court bid to force the RA to unfreeze its accounts so the bank could pay staff salaries.
Rodgers, who is also the Democratic Alliance provincial leader, was the only cabinet member who attended together with a handful of party supporters. Speaking to the media after the adjournment of the case, the MEC said the media should be fielding questions to the National Treasury to get answers on what is causing delays in giving a financial guarantee to the bank after Minister Enoch Godongwana wrote a letter to the provincial government informing it that government would provide a guarantee so that the bank could continue operating.
Rodgers said after taking over the department, he engaged both Kruger and the National Treasury to find a solution to the problems at the bank, adding that the engagement resulted in Godongwana writing a letter to the provincial government, committing himself to giving the bank a guarantee.
“I think the media should be asking the National Treasury about the guarantee, not us in the province. As far as I understand, the Minister has agreed and it’s now up to the Treasury department, particularly the officials, to implement the minister’s undertaking,” said Rodgers.
In his argument, Ithala bank’s lawyer Advocate Sandile Khumalo SC criticised the RA, Kruger whom he accused of orchestrating a systemic collapse of the bank, even ignoring even the guarantee by Godongwana.
However, this was countered by the RA’s lawyer Advocate Etienne Theron who argued that the Minister’s letter was not a guarantee but a promise.
He said the RA wrote back to the Minister and asked him to give an actual guarantee which would come with conditions as determined by the Public Finance Management Act, something the Minister has not responded to.
The Finance Ministry has not yet responded to the questions sent to it.
The more than 60 year-old bank is in a fierce legal battle with the South African Reserve Bank’s financial regulator, the Prudential Authority, over alleged non-compliance with the Banking Act.
