Finance Minister Enoch Godongwana’s transfer to approve a R2 billion assure for the depositors of the troubled Ithala has sparked a powerful response from the KwaZulu-Natal (KZN) Treasury, which says it bears no information of the choice.
In a strongly worded assertion on Friday, the KZN Treasury says it’s in search of readability from Godongwana about “what seems to be a change of angle” in addressing Ithala’s “inherited” challenges.
ADVERTISEMENT
CONTINUE READING BELOW
(The KZN authorities is a shareholder of Ithala.)
Pay attention/Learn:
Ithala saga: The solvency debate
Prudential Authority strikes to liquidate KZN-based Ithala ‘financial institution’
KZN Finance MEC Francois Rodgers notes he not too long ago realized that Godongwana despatched a letter to Lesetja Kganyago, South African Reserve Financial institution (Sarb) governor, on 3 April, informing the governor {that a} authorities assure exceeding R2 billion could be issued to facilitate funds to 223 166 Ithala retail depositors.
The Finance Minister additionally instructed the Sarb governor to nominate a non-public sector monetary establishment to handle these repayments.
“Mr. Godongwana, with out first canvassing his concept with the KZN Authorities of Provincial Unity (GPU), alluded that the province will likely be liable for the compensation of the assure. MEC Rodgers, on behalf of the GPU, needs to state that the actions of Mr Godongwana are usually not supported by the province,” in keeping with the assertion.
Ithala’s woes
The Monetary Sector Conduct Authority (FSCA) suspended Ithala’s banking license in August final yr attributable to liquidity considerations.
Moreover, the Prudential Authority utilized to the Pietermaritzburg Excessive Courtroom to position Ithala below provisional liquidation due to its failure to fulfill monetary soundness necessities and its illegal acceptance of deposits.
The Prudential Authority considers Ithala technically bancrupt, however Ithala, which is opposing the liquidation software, disputes this declare.
This isn’t the primary standoff between Godongwana and the KZN Treasury, which has publicly acknowledged its dedication to making sure Ithala receives the mandatory help for survival. The provincial treasury additionally denies that Ithala faces liquidity issues.
Learn: KZN Treasury at loggerheads with Sarb over Ithala
ADVERTISEMENT:
CONTINUE READING BELOW
Accounts ‘unlawfully frozen’
Rodgers notes that he and his workforce on the provincial treasury have “all the time engaged in good religion” with the finance minister concerning Ithala’s challenges. “We’ve got additionally provided detailed data on the liquidity of the entity and most well-liked motion plans to handle the inherited challenges,” he notes.
The provincial treasury, in keeping with Rodgers, has additionally indicated that the province would offer a assure to guard the accounts of Ithala retail depositors.
“Moreover, a non-public sector monetary establishment could be appointed to allow Ithala depositors to entry and commerce on their accounts, which have been unlawfully frozen by the Compensation Administrator since January this yr.”
Rodgers emphasises that Godongwana’s actions had been by no means mentioned with the GPU and have severe implications for the provincial finances.
“It’s disappointing to notice that quite a few makes an attempt by MEC Rodgers to fulfill with Minister Godongwana on this matter haven’t been met with a response.” Rodgers notes that he “stays open” to assembly with the finance minister and different stakeholders to determine a “mutually helpful answer to this disaster”.
Moneyweb approached Nationwide Treasury for touch upon the Ithala assure. The article will likely be up to date when responses are acquired.
Observe Moneyweb’s in-depth finance and enterprise information on WhatsApp right here.
You might also like
Finance Minister Enoch Godongwana’s transfer to approve a R2 billion assure for the depositors of the troubled Ithala has sparked a powerful response from the KwaZulu-Natal (KZN) Treasury, which says it bears no information of the choice.
In a strongly worded assertion on Friday, the KZN Treasury says it’s in search of readability from Godongwana about “what seems to be a change of angle” in addressing Ithala’s “inherited” challenges.
ADVERTISEMENT
CONTINUE READING BELOW
(The KZN authorities is a shareholder of Ithala.)
Pay attention/Learn:
Ithala saga: The solvency debate
Prudential Authority strikes to liquidate KZN-based Ithala ‘financial institution’
KZN Finance MEC Francois Rodgers notes he not too long ago realized that Godongwana despatched a letter to Lesetja Kganyago, South African Reserve Financial institution (Sarb) governor, on 3 April, informing the governor {that a} authorities assure exceeding R2 billion could be issued to facilitate funds to 223 166 Ithala retail depositors.
The Finance Minister additionally instructed the Sarb governor to nominate a non-public sector monetary establishment to handle these repayments.
“Mr. Godongwana, with out first canvassing his concept with the KZN Authorities of Provincial Unity (GPU), alluded that the province will likely be liable for the compensation of the assure. MEC Rodgers, on behalf of the GPU, needs to state that the actions of Mr Godongwana are usually not supported by the province,” in keeping with the assertion.
Ithala’s woes
The Monetary Sector Conduct Authority (FSCA) suspended Ithala’s banking license in August final yr attributable to liquidity considerations.
Moreover, the Prudential Authority utilized to the Pietermaritzburg Excessive Courtroom to position Ithala below provisional liquidation due to its failure to fulfill monetary soundness necessities and its illegal acceptance of deposits.
The Prudential Authority considers Ithala technically bancrupt, however Ithala, which is opposing the liquidation software, disputes this declare.
This isn’t the primary standoff between Godongwana and the KZN Treasury, which has publicly acknowledged its dedication to making sure Ithala receives the mandatory help for survival. The provincial treasury additionally denies that Ithala faces liquidity issues.
Learn: KZN Treasury at loggerheads with Sarb over Ithala
ADVERTISEMENT:
CONTINUE READING BELOW
Accounts ‘unlawfully frozen’
Rodgers notes that he and his workforce on the provincial treasury have “all the time engaged in good religion” with the finance minister concerning Ithala’s challenges. “We’ve got additionally provided detailed data on the liquidity of the entity and most well-liked motion plans to handle the inherited challenges,” he notes.
The provincial treasury, in keeping with Rodgers, has additionally indicated that the province would offer a assure to guard the accounts of Ithala retail depositors.
“Moreover, a non-public sector monetary establishment could be appointed to allow Ithala depositors to entry and commerce on their accounts, which have been unlawfully frozen by the Compensation Administrator since January this yr.”
Rodgers emphasises that Godongwana’s actions had been by no means mentioned with the GPU and have severe implications for the provincial finances.
“It’s disappointing to notice that quite a few makes an attempt by MEC Rodgers to fulfill with Minister Godongwana on this matter haven’t been met with a response.” Rodgers notes that he “stays open” to assembly with the finance minister and different stakeholders to determine a “mutually helpful answer to this disaster”.
Moneyweb approached Nationwide Treasury for touch upon the Ithala assure. The article will likely be up to date when responses are acquired.
Observe Moneyweb’s in-depth finance and enterprise information on WhatsApp right here.
