Ithala employees present memorandum of grievances
They cited concerns over the institution's performance, neglect of infrastructure and financial oversight.
Union members marched to the IDFC offices in Durban on Thursday to express the concerns to board chairperson Mpumzi Pupuma and the KwaZulu-Natal department of economic development, tourism and environmental affairs.
The union said the IDFC had not demonstrated any visible growth since Bhengu's appointment in 2018, but has seen steady deterioration of Ithala and the institution's broad development mandate.
Nehawu said its main concern was around possible financial mismanagement and negligence in the institution, which they claim had resulted in significant revenue loss and reputational damage.
One was the alarming decline in the performance and upkeep of Ithala's industrial estates.
'The estates, which were once key drivers of economic development and revenue generation, are in a state of disrepair and neglect. The deterioration of the assets represents a huge loss of potential income for the organisation and undermines the developmental mandate Ithala is expected to fulfil, particularly in empowering historically disadvantaged communities and supporting small businesses in KwaZulu-Natal.'
This has contributed to the high vacancy rate at the institution's industrial estates, which stands at more than 40%.
The union also highlighted the neglect of Ithala's property portfolio, stating some shopping centres under Ithala remain non-operational despite insurance payouts.
'Buildings and properties, many of which are strategically located, are either underutilised, mismanaged or abandoned. The failure to manage revenue-generating assets responsibly reflects not only poor leadership but also gross financial mismanagement. It raises serious questions about accountability, planning and the strategic direction of the entity.'
The union also pointed to the departure of tenants such as Mensu, Defy and other significant businesses from IDFC-managed industrial estates as indicators of the decline.
'That is a direct result of deteriorating infrastructure, lack of strategic tenancy management and failure to create a conducive investment environment.'
The union said it was also concerned about allegations its members had made about Bhengu and management, including:
The failure to provide essential tools of trade to workers who carry out vital functions within the institution and an alleged display of arrogance and dismissiveness by some of management's representatives in the local labour forum.
Favouritism in the appointment of personnel in critical positions by Bhengu and the human capital management unit, with allegations that since Bhengu's arrival at IDFC, there had been an 'a notable influx' of individuals previously associated with the South African Social Security Agency, the institution Bhengu came from.
'It is precisely because of this continued inaction and disregard that we are gathered here today to submit a memorandum of demands and to place on record, once again, the urgent need for decisive intervention and change at Ithala.'
Its demands included:
An independent forensic audit of appointments made under the tenure of the leadership.
The immediate suspension of all questionable appointments pending a review.
The establishment of an inclusive recruitment oversight committee to ensure future transparency, fairness and compliance with Ithala's HR policies.
An immediate investigation into the issuance of purchase orders to tenants receiving rental concessions and the suspension of all self-maintenance arrangements until a transparent, fraud-proof verification system is put in place.
Termination of any lease agreement where the primary occupant is found to be in breach of IDFC policy and strengthening of internal controls to prevent future policy violations related to the use of Ithala-owned properties.
Nehawu gave the IDFC board and KwaZulu-Natal department of economic development, tourism and environmental affairs 14 days to respond to its grievances.
'There is a palpable and growing sense of institutional collapse and any further delays in addressing the issues will only accelerate the deterioration.
'We caution that inaction will carry grave consequences for your leadership and the of IDFC as a public entity entrusted with a developmental mandate,' the union said in its memorandum.
It said issues raised were grave and systemic and demanded IDFC's immediate and undivided attention.
The union refused to hand the memorandum to an IDFC representative, saying it wanted to submit it to Pupuma or any other member of the board.
The memorandum was eventually received by Boyce Mntambo, director of eThekwini district operations for the KwaZulu-Natal department of economic development, tourism and environmental affairs.
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Ithala employees present memorandum of grievances
Workers at Ithala Development Finance Corporation (IDFC), represented by the National Education, Health and Allied Workers' Union (Nehawu), have raised red flags about management of the institution under the group CEO Pearl Bhengu. They cited concerns over the institution's performance, neglect of infrastructure and financial oversight. Union members marched to the IDFC offices in Durban on Thursday to express the concerns to board chairperson Mpumzi Pupuma and the KwaZulu-Natal department of economic development, tourism and environmental affairs. The union said the IDFC had not demonstrated any visible growth since Bhengu's appointment in 2018, but has seen steady deterioration of Ithala and the institution's broad development mandate. Nehawu said its main concern was around possible financial mismanagement and negligence in the institution, which they claim had resulted in significant revenue loss and reputational damage. One was the alarming decline in the performance and upkeep of Ithala's industrial estates. 'The estates, which were once key drivers of economic development and revenue generation, are in a state of disrepair and neglect. The deterioration of the assets represents a huge loss of potential income for the organisation and undermines the developmental mandate Ithala is expected to fulfil, particularly in empowering historically disadvantaged communities and supporting small businesses in KwaZulu-Natal.' This has contributed to the high vacancy rate at the institution's industrial estates, which stands at more than 40%. The union also highlighted the neglect of Ithala's property portfolio, stating some shopping centres under Ithala remain non-operational despite insurance payouts. 'Buildings and properties, many of which are strategically located, are either underutilised, mismanaged or abandoned. The failure to manage revenue-generating assets responsibly reflects not only poor leadership but also gross financial mismanagement. It raises serious questions about accountability, planning and the strategic direction of the entity.' The union also pointed to the departure of tenants such as Mensu, Defy and other significant businesses from IDFC-managed industrial estates as indicators of the decline. 'That is a direct result of deteriorating infrastructure, lack of strategic tenancy management and failure to create a conducive investment environment.' The union said it was also concerned about allegations its members had made about Bhengu and management, including: The failure to provide essential tools of trade to workers who carry out vital functions within the institution and an alleged display of arrogance and dismissiveness by some of management's representatives in the local labour forum. Favouritism in the appointment of personnel in critical positions by Bhengu and the human capital management unit, with allegations that since Bhengu's arrival at IDFC, there had been an 'a notable influx' of individuals previously associated with the South African Social Security Agency, the institution Bhengu came from. 'It is precisely because of this continued inaction and disregard that we are gathered here today to submit a memorandum of demands and to place on record, once again, the urgent need for decisive intervention and change at Ithala.' Its demands included: An independent forensic audit of appointments made under the tenure of the leadership. The immediate suspension of all questionable appointments pending a review. The establishment of an inclusive recruitment oversight committee to ensure future transparency, fairness and compliance with Ithala's HR policies. An immediate investigation into the issuance of purchase orders to tenants receiving rental concessions and the suspension of all self-maintenance arrangements until a transparent, fraud-proof verification system is put in place. Termination of any lease agreement where the primary occupant is found to be in breach of IDFC policy and strengthening of internal controls to prevent future policy violations related to the use of Ithala-owned properties. Nehawu gave the IDFC board and KwaZulu-Natal department of economic development, tourism and environmental affairs 14 days to respond to its grievances. 'There is a palpable and growing sense of institutional collapse and any further delays in addressing the issues will only accelerate the deterioration. 'We caution that inaction will carry grave consequences for your leadership and the of IDFC as a public entity entrusted with a developmental mandate,' the union said in its memorandum. It said issues raised were grave and systemic and demanded IDFC's immediate and undivided attention. The union refused to hand the memorandum to an IDFC representative, saying it wanted to submit it to Pupuma or any other member of the board. The memorandum was eventually received by Boyce Mntambo, director of eThekwini district operations for the KwaZulu-Natal department of economic development, tourism and environmental affairs.
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She is also alleged to have interfered with media freedom by pressing for the dismissal of a radio presenter critical of undocumented migrants accessing state health care. Hlomuka is faced with allegations of political interference and personal enrichment in the controversial R2.9bn national schools nutrition programme tender scandal. He is alleged to have interfered with the tender processes to benefit his allies in the ANC and has since been directly linked after it emerged a company registered to him in 2015 was among the beneficiaries of the tender issued by his department. The two officials have denied any wrongdoing, claiming they had severed ties with the companies long before the dealings and the positions they've had in government had no influence in procurement processes. Simelane said she resigned from her family business in 2004, which was four years before it received the Ithala loan. At the time, she was a junior official in government with no influence on Ithala's funding decisions. She said funding to her family business predated her tenure as committee chair. Hlomuka acknowledged the implicated company was registered by him when he was not part of government and claimed he had relinquished his stake well before taking office and he is not aware of its activities. Opposition parties in the legislature, the MK Party and the EFF, called on Ntuli to remove the two MECs from the provincial cabinet. The two parties repeated the calls during budget speech presentations by Simelane and Hlomuka on Tuesday, going as far as stating the ANC should apply its 'step-aside' rule until they are cleared. The premier's office said the two submissions are undergoing careful review and the process would adhere to the constitutional principles of fairness and administrative justice. Ntuli's spokesperson Bongani Gina said: 'The premier has reiterated his commitment to handling the matter with the utmost integrity, transparency and accountability. Further communication will be issued on conclusion of the review process as the premier's undertaking to transparency and good governance.'
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The future of Ithala bank continues to argued in court Image: Doctor Ngcobo / Independent Newspapers The need to preserve the existence of Ithala Bank cannot override the rule of law, as Ithala was always required to comply with the Banks Act; this was the argument heard by the three Judges (full bench) at the Durban High Court on Friday. This is because the Ithala's Repayment Administrator (RA) and the South African Reserve Bank's Prudential Authority (PA) are appealing the Pietermaritzburg High Court decision that the entity can continue to conduct its business. Ithala held an exemption from the PA, which allowed it to take deposits. That exemption expired in December 2023. In January, the PA filed for Ithala's liquidation, and Johannes Kruger, the RA, instructed Absa Bank Limited to freeze all Ithala's accounts following the expiration of the exemption. However, Ithala continued to accept deposits and failed to assure the PA that it would cease its deposit-taking activities. 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Next Stay Close ✕ As a result of Kruger's instruction, Ithala's day-to-day running effectively stopped on January 16, 2025. Ithala took this to the Pietermaritzburg High Court, and Judge Muzi Ncube interdicted and restrained Kruger from issuing any instructions. He said, pending the outcome of the liquidation appeal, Ithala could continue with its day-to-day running. T he Judge also stated that Kruger lacks operational and management control over Ithala's day-to-day operations. Moreover, Judge Ncube said if Ithala was forced to close its doors, members of the public would not be able to access their funds, and those who are South African Social Security Agency (Sassa) recipients would not be able to access their grants. He said the bank could be sued by unpaid service providers, and it could be evicted from its lease premises. Additionally, the Judge granted PA and Kruger leave to appeal his ruling at the Supreme Court of Appeal (SCA) and made an order for his ruling to remain in force, pending the appeal. In written arguments heard by the full bench, Kruger said Ithala should not frustrate his ability as RA to take over the operations and its assets to achieve the objective of his appointment. On December 18, 2023, the PA appointed Kruger as the RA. His appointment related to the repayment management of deposits collected unlawfully by Ithala. He asked for the full bench to set aside the orders made by Judge Ncube to give the bank the green light to function. 'If depositors will suffer harm and Ithala also claims that it will suffer harm, for purposes of the interim interdict, this court will weigh the balance of convenience,' the PA argued. The PA further argued that, according to sections 18(1) and 18(3), Judge Ncube should have rejected Ithala's application if it meant that depositors would also face irreparable harm, as this would violate their rights. 'Granting the orders would also go against the clear responsibilities outlined in the Banks Act, which are designed to protect depositors' interests,' read the arguments. In its response, Ithala said both PA and Kruger believe that they have the effect of suspending the constitution of the country, the basic conditions of the Employment Act 75 of 1997, the Companies Act of 71 of 2008, and the Income Tax Act 58 of 1962, amongst others. 'They believe they can unilaterally decide to halt the operations of a State-owned company and cancel all its contracts with its employees and service providers without a court order in circumstances where there is a pending litigation before the Courts over the extent of their powers,' Ithala said in its written arguments. It added that on January 20, 2025, Kruger, in defiance of an existing court order, unilaterally determined that salaries and benefits of Ithala employees would not be paid. Ithala warned that if the full bench rules in favour of PA and RA, the bank will shut down before the SCA appeal on its liquidation is heard. The provincial government, which has joined the fight in support of Ithala, said the findings of Judge Ncube were correct. 'Ithala has been placed in limbo through the conduct of Kruger,' it said.
