3 days ago
Repayment administrator must be given back access to Ithala accounts, judges rule
Ithala had been the author of its own misfortunes in continuing to operate as a bank, taking deposits and co-mingling them in its accounts, three judges have ruled.
However, it had the option to continue operating its normal businesses if it co-operated with the repayment administrator (RA) appointed by the South African Reserve Bank Prudential Authority (PA).
'Perhaps the migration of the deposits to another bank would help Ithala's cause,' KwaZulu-Natal deputy judge president Zaba Nkosi, writing on behalf of judge Garth Harrison and acting judge David Saks, said in a ruling handed down on Friday.
Ithala held an exemption from the PA which entitled it to take deposits, many of which were Sassa pensions, until December 2023, when it expired.
The PA alleged Ithala continued taking deposits until January when it appointed the RA, Johan Kruger, to take control and secure the deposits for repayment and redistribution.
There has been a flurry of litigation over his powers, including an application by the KwaZulu-Natal government seeking to review and set aside his appointment, and an application by Kruger to liquidate Ithala after it failed to repay more than R2.4bn it held in deposits on demand.
At the heart of the dispute which came before the full bench, sitting in the Durban high court last month, was an order granted in November last year by Pietermaritzburg high court judge Muzi Ncube, who ruled, effectively, Kruger had overstepped his powers by freezing all of Ithala's bank accounts, not only those containing the deposits.
