Judgement reserved in Ithala liquidation matter
The Pietermaritzburg High Court sitting in the
Durban Labour Court on Monday heard arguments in the matter of Ithala SOC and
the liquidation application brought against it by the South African Reserve
Bank’s Prudential Authority.
The Prudential Authority filed the application in January, saying it was to protect depositors.
It was the Repayment Administrator found that Ithala was legally and technically insolvent and ordered the bank to stop transactions.
Ithala challenged the move, calling it flawed and frivolous.
It’s asking the court to allow it to continue operating normally pending the outcome of the liquidation application.
The various parties presented their arguments before Judge Muzi Ncube on Monday.
Ithala's lawyer, Sandile Khumalo, stated that they want the court to first uphold the November ruling that Repayment Administrator Johannes Kruger overstepped his powers when he sought to control the operations of Ithala last year.
Khumalo said the PA's argument that Ithala is legally and technically insolvent, is made up.
"And this idea that depositors are at risk… My Lord, when we were before you in August, the same facts existed. Salaries were being paid. Service providers were being paid.
"So, for almost 12 months, there was no issue. Salaries were being paid. Service providers were being paid. Why now? Why suddenly is there harm to depositors?
READ: Labour Court hearing Ithala liquidation application
"Because they have engineered this liquidation application."
The administrator's lawyer, Etienne Theron, argued that Ithala is the author of its own downfall by not applying for a banking licence on time and doing everything in accordance.
He said the administrator might consider loosening the grip should they receive confirmation that the guarantee promised by National Treasury that Ithala will not face solvency issues.
"We say, put it up, show us the guarantee, and we will reconsider our position. Of course we will. There's no interest for the Repayment Administrator in closing these accounts.
"There's a very personal reference to him during arguments in the press and by politicians, but he has a statutory duty to take possession of all of these assets."
Judgement has been reserved
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