ActionSA remains deeply concerned about the devastating impact of the collapse of development finance agency Ithala SOC, following the Reserve Bank’s Prudential Authority filing for its provisional liquidation and leaving little doubt that Ithala’s fate as yet another failed state-owned entity is now sealed.
In September last year, ActionSA raised the alarm that, without a capital injection by the KZN Government as the shareholder or by National Treasury, Ithala would not be adequately capitalised, and consequently, its collapse was inevitable.
Four months later, exactly as predicted, the Prudential Authority announced yesterday that it had applied for the provisional liquidation of Ithala, citing the need to protect the best interests of the roughly 257 000 Ithala depositors.
Ithala’s latest assertion that it will oppose the Prudential Authority’s application provides no confidence that anything meaningful can be done to reverse the agency’s collapse, the impact of which, most importantly, falls hardest on its customers, who simply cannot afford to lose their money.
ActionSA has consistently made it clear that, considering the tragic lessons from the VBS scandal, Ithala’s collapse would represent an embarrassing failure of accountability and foresight. Sadly, as the agency’s fate is sealed, its demise is evidence of a blatant disregard for past mistakes, leaving the communities that rely on it exposed to significant risk, with their deposits now hanging in the balance.
ActionSA notes National Treasury’s assurance to the agency’s clients that their deposits will be protected by a government guarantee but believes that, as the “necessary technical work” is underway and will inevitably drag on, there is an urgent need to protect customers during this intervening period, especially those from vulnerable communities, who risk being left without their money.
Ithala’s Fate Sealed as Reserve Bank Seeks Provisional Liquidation, As ActionSA Warned
ActionSA remains deeply concerned about the devastating impact of the collapse of development finance agency Ithala SOC, following the Reserve Bank’s Prudential Authority filing for its provisional liquidation and leaving little doubt that Ithala’s fate as yet another failed state-owned entity is now sealed.
In September last year, ActionSA raised the alarm that, without a capital injection by the KZN Government as the shareholder or by National Treasury, Ithala would not be adequately capitalised, and consequently, its collapse was inevitable.
Four months later, exactly as predicted, the Prudential Authority announced yesterday that it had applied for the provisional liquidation of Ithala, citing the need to protect the best interests of the roughly 257 000 Ithala depositors.
Ithala’s latest assertion that it will oppose the Prudential Authority’s application provides no confidence that anything meaningful can be done to reverse the agency’s collapse, the impact of which, most importantly, falls hardest on its customers, who simply cannot afford to lose their money.
ActionSA has consistently made it clear that, considering the tragic lessons from the VBS scandal, Ithala’s collapse would represent an embarrassing failure of accountability and foresight. Sadly, as the agency’s fate is sealed, its demise is evidence of a blatant disregard for past mistakes, leaving the communities that rely on it exposed to significant risk, with their deposits now hanging in the balance.
ActionSA notes National Treasury’s assurance to the agency’s clients that their deposits will be protected by a government guarantee but believes that, as the “necessary technical work” is underway and will inevitably drag on, there is an urgent need to protect customers during this intervening period, especially those from vulnerable communities, who risk being left without their money.