Latest news with #R2bn
TimesLIVE
21-05-2025
- Business
- TimesLIVE
National Lotteries Commission vows to right wrongs identified by A-G
The National Lotteries Commission (NLC) says it remains committed to addressing systemic failures and other problems cited by the auditor-general (A-G) in its 2023/24 audit outcomes. Last week, the A-G issued a qualified audit outcome for the NLC. It noted systematic failures in governance, weak financial controls, lack of service delivery and failure to comply with legislation. The A-G warned that the NLC had undermined its own mandate by failing to ensure funds reached the intended beneficiaries. In a statement on Wednesday, the NLC said corrective actions were under way. 'The NLC has implemented stricter pre-payment documentation checks, updated its accounting policies in line with generally accepted accounting practice, strengthened asset management controls and is automating key elements o the grant funding process.' The commission said it had suspended payments on flagged grants, pending individual compliance reviews. It had also established a loss control committee to investigate irregular expenditure and oversee consequence management. 'Progress on these measures will be reflected in the commission's forthcoming mid-year performance update.' This will be in October. The commission said a stable and skilled workforce was essential for effective oversight of grant funding and regulatory functions. 'Therefore the NLC is advancing senior leadership appointments and driving an organisation-wide hiring programme to reduce current vacancy levels and strengthen critical capabilities.' The commission said it was also collaborating with the A-G, the portfolio committee on trade, industry and competition and the National Treasury to align remedial milestones and secure technical support. 'We confirm that the finance team has worked tirelessly to enhance governance and improve policies and processes to address the internal control deficiencies identified. The NLC board and senior management have made significant strides in closing off these matters and is confident that in the new financial year 2025/26, the outcome will improve,' said NLC commissioner Jodi Scholtz. Meanwhile, the standing committee on public accounts says it wants answers from the commission and the department of trade, industry and competition after two concerning briefings from the A-G and the Special Investigating Unit (SIU) that revealed weak financial management, maladministration and corruption at the NLC amounting to over R2bn. Last week, the A-G briefed Scopa on the NLC's 2023/24 audit outcomes and financial performance. Scopa said key audit findings included: grants allocated to unqualified applicants with no supporting documentation, overfunding of projects lacking feasibility studies or proper plans, underspending of R957m on grants from a R1.52bn budget incomplete or undelivered infrastructure projects, including the Motheo Sports Complex and eDumbe Old Age Home, high vacancy rates in critical units such as finance, ICT and grants adjudication, and only 67% of grant targets and 75% of regulatory compliance benchmarks were achieved. On Wednesday, the SIU briefed the committee on investigations under way at the NLC. The COO at the SIU, Leonard Lekgetho, told Scopa that investigations mandated by Proclamation R32 of 2020 — for the period January 2014 to November 2020 — uncovered a corruption network involving senior NLC officials, board members, professional enablers and hijacked non-profit entities. The SIU also noted a modus operandi of funnelling grants through hijacked non-profit organisations and non-profit companies as well as fraudulent applications backed by doctored financials from complicit auditing firms.
The Citizen
12-05-2025
- Business
- The Citizen
Prudential Authority to appeal ruling on Ithala Bank liquidation
The KZN government has voiced its support for Ithala. The Prudential Authority has suffered a legal setback in its efforts to liquidate Ithala Bank. The regulatory body, tasked with overseeing South African banks, initiated provisional liquidation proceedings against Ithala earlier this year, prompting the freezing of the state-owned bank's accounts. However, the KwaZulu-Natal (KZN) High Court in Pietermaritzburg delivered a ruling last week allowing Ithala to fully resume its operations. The institution, which falls under the South African Reserve Bank (Sarb), has since confirmed its intention to appeal the ruling. Prudential Authority to appeal Ithala Bank judgment Repayment administrator Johan Kruger is also set to challenge the judgment through an appeal. 'It is important to note that the RA has, in any event, complied with the court's prior order not to take control of Ithala's non-deposit-taking operations. 'However, the RA has been unable to isolate depositor funds from other funds as Ithala has never maintained a separation between its deposit-taking activities and its other business operations,' the institution's statement reads. ALSO READ: KZN Treasury unhappy with Godongwana's R2bn guarantee to Ithala depositors The Prudential Authority further clarified that the court's judgment pertains only to Kruger's role and does not affect the broader liquidation application, which remains pending before the same court. 'The PA awaits the finalisation of the liquidation application.' The authority emphasised that its primary responsibility is to protect the interests of Ithala's depositors. 'In this context, while the PA understands the frustration and difficulty this situation may cause for depositors, the freezing of accounts remains a necessary and prudent step to safeguard the depositors' remaining funds. 'This measure aims to ensure a fair and lawful distribution process of depositor funds while awaiting the outcome of the liquidation application.' KZN government backs Ithala, criticises Prudential Authority KZN Premier Thamsanqa Ntuli had welcomed the judgment, calling on depositors not to panic or engage in a 'run on the bank'. 'As the KwaZulu-Natal provincial government, we wish to place it on record that we strongly oppose any attempts to interrupt the activities and operations of Ithala Bank. 'We believe the claims made by the Prudential Authority are unfounded and appear to form part of a broader agenda to undermine one of the few financial institutions historically designed to serve marginalised communities in KwaZulu-Natal,' Ntuli said in a statement. READ MORE: KZN Treasury at loggerheads with Sarb over Ithala Ithala liquidation The Prudential Authority is seeking Ithala's liquidation on the basis that the bank has been accepting deposits unlawfully. The repayment administrator had declared the institution both technically and legally insolvent. Ithala had historically operated as a bank through several exemption notices issued under the Banks Act, despite never having been granted a formal banking licence. The Financial Sector Conduct Authority (FSCA) suspended Ithala's licence in August 2024 due to concerns over the institution's liquidity. The bank's liquidation could affect at least 257 000 clients. NOW READ: Ramaphosa authorises SIU to investigate Ithala and its employees
The Citizen
09-05-2025
- Business
- The Citizen
Sarb clarifies ‘misinformation' about Ithala liquidation
Provides answers to frequently asked questions. The Prudential Authority is awaiting the court's decision on the liquidation application for Ithala. Picture: File The South African Reserve Bank (Sarb) has issued a media release to set the record straight on what it calls 'misinformation' circulating about Ithala. In January this year, the Prudential Authority, a division of the Sarb responsible for supervising banks and financial institutions, announced that it had filed for the provisional liquidation of Ithala at the Pietermaritzburg High Court. The Prudential Authority and the appointed repayment administrator are awaiting the court's decision on the liquidation application. Meanwhile, the Sarb provides answers to some frequently asked questions. If Ithala was never a registered bank, why was it allowed to take deposits? Although Ithala was never registered as a bank, it was allowed to operate as one through exemptions issued by the Registrar of Banks, which later became the Prudential Authority. These exemptions required Ithala to separate its deposit-taking activities from its other businesses, such as providing loans. Ithala failed to do so. ALSO READ: KZN Treasury unhappy with Godongwana's R2bn guarantee to Ithala depositors Have all Ithala's bank accounts been frozen? No. The repayment administrator, appointed by the Prudential Authority, instructed Absa Bank Limited to freeze only Ithala's deposit-taking accounts. From 16 January 2025, Ithala could no longer receive deposits or make payments from these accounts, affecting depositors. This action was taken to prevent a run on Ithala (a situation where a large number of depositors try to withdraw their funds at once, potentially causing a collapse) and ensure an orderly and fair repayment to all depositors. (Absa acted as the intermediary bank since Ithala is not a licensed bank.) Has the repayment administrator and/or the Prudential Authority acted contrary to Judge Ncube's order delivered in the Pietermaritzburg High Court? No. In the judgment, it was confirmed that the repayment administrator was allowed to take control of Ithala's deposit-taking activities. It was also confirmed that Ithala was not permitted to accept deposits from the public. The repayment administrator has requested permission to appeal the judgment to the extent that it stops him from taking control of all of Ithala's assets. The repayment administrator deems this necessary because Ithala did not separate its deposit-taking activities from its other businesses, like giving loans to the public. Even though applying for an appeal pauses the judgment, the repayment administrator is still complying with Judge Ncube's order. He has only frozen accounts related to Ithala's illegal deposit-taking, which is in line with the judgment. ALSO READ: Treasury to 'protect' 257 000 clients affected by Ithala liquidation Has the repayment administrator lied about Ithala's solvency and liquidity in order to place it into liquidation? No. The repayment administrator tasked independent forensic accountants to assess Ithala's solvency and liquidity. Their report found that Ithala is technically insolvent, meaning its liabilities exceed its assets. Specifically, Ithala's liabilities amount to R2.79 billion, while its total assets stand at R2.35 billion, resulting in a shortfall of R441.63 million. This insolvency report, now a public record, was submitted to the court for liquidation proceedings. Between 31 March 2008 and 31 March 2024, Ithala incurred R520 million in losses due to a high-cost structure misaligned with its size, complexity, and risk profile. No, the repayment administrator operates under the direction of the Prudential Authority and does not act independently. All actions taken by the repayment administrator have been with the consent of the Prudential Authority. The liquidation application was brought by the Prudential Authority. The purpose of the repayment administrator is to safeguard Ithala's assets and see to it that the depositors are repaid. ALSO READ: ANC tasks transformation sub-committee to rescue embattled Ithala Bank Has Ithala's client database been unlawfully transferred to another commercial bank? No. Following the Prudential Authority's instructions, the repayment administrator has engaged with registered banks to appoint a repayment bank, enabling the repayment of unlawfully taken deposits owed to Ithala clients. This step is required by the Banks Act. Are Ithala clients still required to repay their loans? Ithala's clients are still responsible for repaying their loans. The Prudential Authority's actions regarding Ithala do not cover its loan business. However, Ithala has notified all clients via SMS that loan repayments must now be made to a different Ithala account. This article was republished from Moneyweb. Read the original here.
Zawya
26-03-2025
- Business
- Zawya
South Africa: A promising step forward as Eskom moves from crisis to innovation
Eskom is undergoing a quiet shift, from crisis to innovation, moving from a lack of agility and vision to embracing creativity and technology in its energy management and financial recovery. Mark Allewell, CEO & founder at Sensor Networks says Eskom's quiet shift from crisis to innovation is a promising step forward The entity is showing a willingness to explore non-traditional solutions, from smart meters to microgrids, that could redefine its role in securing South Africa's energy future. . For years, we've watched leadership changes justified by qualifications and experience, but rarely by creativity. Maluti-a-Phofung Municipality case study A key initiative is Eskom's growing collaboration with municipalities to curb illegal connections and recover outstanding debt, which now approaches R100bn. The case study with Maluti-a-Phofung Municipality demonstrated a proactive approach, recovering R2bn while strengthening local governance over energy distribution. Instead of treating municipalities as adversaries, Eskom is recognising them as partners in stabilizing the grid. Smart metering Smart metering is another crucial step forward. With built-in anti-tampering technology, these meters can enhance transparency and efficiency in power consumption tracking. Smart technology is essential, not only for Eskom's operational control but also for consumers to better manage their own electricity use. It's time for South Africans to see themselves as active participants in energy sustainability, by using smart geyser devices, energy management apps on their cellphones, timers, and eco-friendly appliances to reduce reliance on the grid. Recent media reports have confirmed that Calib Cassim, Eskom's chief financial officer, shares this outlook. Cassim has made it clear that Eskom's financial recovery and long-term sustainability depend on innovative, technology-driven solutions, and that smart metering offers a practical step towards stabilizing our grid. Alternative energy solutions Eskom's recent openness to alternative energy solutions signals a welcome departure from its traditional, centralised model. For too long, Eskom has embodied the definition of insanity: doing the same thing repeatedly while expecting different results. Now, we're seeing a shift towards smarter, more adaptive solutions that engage both technology and public-private collaboration. A promising step forward While no single strategy will solve South Africa's energy challenges overnight, this evolution in thinking offers a promising step forward. If Eskom can continue to embrace innovation rather than brute-force solutions, the future of power stability in South Africa may be more hopeful than we once believed. All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
