Latest news with #MutualBanksAct
The Star
12 hours ago
- Business
- The Star
Reserve Bank probes Nthabeleng Likotsi over alleged false information in bank application
Sifiso Mahlangu | Published 5 hours ago The South African Reserve Bank has launched an investigation into Nthabeleng Likotsi and her bank, YWBN Mutual Bank, over claims that she may have provided false or misleading information during the bank's application process. The move follows a major fallout with investment firm AFRIBIZ Financial Services, and could lead to serious legal consequences for Likotsi. At the centre of the controversy is a failed R9 million deal between AFRIBIZ and YWBN. AFRIBIZ says it paid this amount for a 26% stake in the mutual bank. But after the bank allegedly failed to meet key regulatory requirements, the promised shares were not issued. Instead of receiving their 26% shareholding, AFRIBIZ claims it was offered just 2% as part of a "full and final settlement" — an offer the company immediately rejected. 'They sold us shares. We paid. Now we want what we paid for,' said a source close to AFRIBIZ's legal team. 'Returning the money is not good enough. That was never part of the agreement.' The Reserve Bank is now reviewing whether Likotsi or anyone at YWBN knowingly gave misleading or untrue information as part of their application to register the bank. Under the Mutual Banks Act, it is a criminal offence to do so. Legal experts say the situation is serious. Advocate Mandla Tshabalala, a corporate law specialist, explained: 'When someone pays for shares and you offer a refund instead, it sends the message that either the shares don't exist, or you never intended to follow through.' AFRIBIZ has made it clear they are not backing down. They insist that the R9 million payment was labelled as 'non-refundable' and was meant to secure actual shares, not a promise or future negotiation. 'This is not just about a disagreement,' said one banking insider. 'It raises questions about trust, transparency, and whether proper processes were followed from the beginning.' This is not the first time YWBN has faced trouble. In 2021, the Companies and Intellectual Property Commission Tribunal ruled that YWBN had failed to follow rules under the Co-operatives Act and ordered the return of funds to investors. For Likotsi, the situation is especially damaging. Just a few years ago, she made headlines as the first black woman to start a mutual bank in South Africa — a historic and inspiring achievement. But now, that legacy is under threat. 'She started on the wrong foot,' said a senior banking executive. 'This was a chance to prove that new leadership could work in the sector. But instead, we're seeing delays and avoidance.' Likotsi, however, has defended her actions. She says YWBN made the offer to AFRIBIZ in good faith, trying to resolve issues that arose after regulatory compliance problems. She insists the door remains open for future collaboration. Still, critics argue the damage has already been done. The Reserve Bank's investigation could take time, but its outcome may have lasting effects not only on Likotsi's future but on the image of mutual banking in South Africa. With AFRIBIZ considering legal action and investor trust shaken, YWBN faces an uphill battle to restore credibility. As the inquiry continues and public scrutiny intensifies, what once seemed like a bold step forward for financial inclusion now hangs in the balance.
IOL News
17 hours ago
- Business
- IOL News
Reserve Bank probes Nthabeleng Likotsi over alleged false information in bank application
The South African Reserve Bank has launched an investigation into Nthabeleng Likotsi and her bank, YWBN Mutual Bank. Image: IOL / Independent Newspapers The South African Reserve Bank has launched an investigation into Nthabeleng Likotsi and her bank, YWBN Mutual Bank, over claims that she may have provided false or misleading information during the bank's application process. The move follows a major fallout with investment firm AFRIBIZ Financial Services, and could lead to serious legal consequences for Likotsi. At the centre of the controversy is a failed R9 million deal between AFRIBIZ and YWBN. AFRIBIZ says it paid this amount for a 26% stake in the mutual bank. But after the bank allegedly failed to meet key regulatory requirements, the promised shares were not issued. Instead of receiving their 26% shareholding, AFRIBIZ claims it was offered just 2% as part of a "full and final settlement" — an offer the company immediately rejected. 'They sold us shares. We paid. Now we want what we paid for,' said a source close to AFRIBIZ's legal team. 'Returning the money is not good enough. That was never part of the agreement.'The Reserve Bank is now reviewing whether Likotsi or anyone at YWBN knowingly gave misleading or untrue information as part of their application to register the bank. Under the Mutual Banks Act, it is a criminal offence to do so. Legal experts say the situation is serious. Advocate Mandla Tshabalala, a corporate law specialist, explained: 'When someone pays for shares and you offer a refund instead, it sends the message that either the shares don't exist, or you never intended to follow through.'AFRIBIZ has made it clear they are not backing down. They insist that the R9 million payment was labelled as 'non-refundable' and was meant to secure actual shares, not a promise or future negotiation.'This is not just about a disagreement,' said one banking insider. 'It raises questions about trust, transparency, and whether proper processes were followed from the beginning.' This is not the first time YWBN has faced trouble. In 2021, the Companies and Intellectual Property Commission Tribunal ruled that YWBN had failed to follow rules under the Co-operatives Act and ordered the return of funds to investors. 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 ✕ Ad loading For Likotsi, the situation is especially damaging. Just a few years ago, she made headlines as the first black woman to start a mutual bank in South Africa — a historic and inspiring achievement. But now, that legacy is under threat.'She started on the wrong foot,' said a senior banking executive. 'This was a chance to prove that new leadership could work in the sector. But instead, we're seeing delays and avoidance.' Likotsi, however, has defended her actions. She says YWBN made the offer to AFRIBIZ in good faith, trying to resolve issues that arose after regulatory compliance problems. She insists the door remains open for future collaboration. Still, critics argue the damage has already been done. The Reserve Bank's investigation could take time, but its outcome may have lasting effects not only on Likotsi's future but on the image of mutual banking in South Africa. With AFRIBIZ considering legal action and investor trust shaken, YWBN faces an uphill battle to restore credibility. As the inquiry continues and public scrutiny intensifies, what once seemed like a bold step forward for financial inclusion now hangs in the balance.
IOL News
08-05-2025
- Business
- IOL News
Court allows YWBN Mutual Bank to rebrand as eNL Mutual Bank ahead of launch
South Gauteng High Court allows YWBN Mutual Bank to rebrand as eNL Mutual Bank ahead of the launch Image: IOL / Independent Newspapers In a landmark ruling, the South Gauteng High Court has granted an urgent interim order in favour of YWBN Mutual Bank, allowing the bank to change its name to eNL Mutual Bank ahead of its scheduled launch next month. The court's decision on Wednesday comes amid ongoing delays and frustrations over the South African Reserve Bank (SARB) Prudential Authority's (PA) refusal to approve the name change, which threatens the bank's operational timeline. Background and Legal Action YWBN Mutual Bank was initially approved to establish in March 2021, with the South African Reserve Bank (SARB) granting authorisation on January 29, 2024, under Section 13 of the Mutual Banks Act. Despite this, the bank encountered hurdles when seeking the SARB's permission to amend its name. The Reserve Bank showed little interest in processing the request, effectively stalling the bank's plans to rebrand ahead of its launch. In response, Nthabeleng Likotsi, the founder of YWBN Mutual Bank, along with her legal team, filed an application in the South Gauteng High Court seeking an urgent order to compel SARB to approve the name change. Court Ruling and Key Quotes Judge Mudau presided over the matter and delivered a ruling that, while not fully deciding on the merits of the name change, granted a provisional order allowing the bank to proceed with rebranding. The court ordered SARB to, within 48 hours, record the new name, eNL Mutual Bank, in its official records. The court's judgment stated, "The respondent and the registrar are directed to, within 48 hours of this order, enter the new name in their records in place of the former name, provided the certificate previously issued is delivered for cancellation. A new certificate shall then be issued to the applicant under the new name." The court further indicated that SARB has until June 9 to justify why a full order should not be granted, effectively giving the regulator a final deadline to act. Impact and Significance This ruling marks a historic milestone, making Likotsi the first woman in South Africa to have her name associated with a bank—an achievement that places her among the ranks of notable banking pioneers such as Barclays and JP Morgan. In her affidavit, Likotsi stated that the proposed name has already been tested in the market during the 'Own the Bank Share Scheme,' surpassing its initial projections by attracting 10,000 subscribers—more than three times the target. 'This overwhelming response demonstrates strong public support for the name and the bank's mission." 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 ✕
