OUTA has called for accountability after national treasury issued a R2.2bn guarantee to ensure the payout of Ithala customers. The Organisation Undoing Tax Abuse (OUTA) is questioning the lack of accountability surrounding the R2.2 billion put forth by the national Treasury to enable payouts forIthalaSOC Ltd clients. Last week, National Treasury announced it willprovideup to R2.2 billionso thatIthala’s depositors can be repaid after the state-owned company fell into difficulty.
“The National Treasury, following consultations with the KwaZulu-Natal Provincial Government, will make up to R2.2 billion available to enable the repayment of depositors ofIthalaSOC Limited (‘Ithala’),” Treasury said. The payout process starts on8 December 2025, with deposits being paid within about two days after verification. IthalaSOC Limited falls under the KwaZulu-Natal provincial government.
Despite acting like a bank for years through the use of an exemption provided by the Finance Minister,Ithaladid not obtain a banking licence. When the exemption was not renewed in December 2023, theSA Reserve Bank’s Prudential Authority (PA) When the exemption was not renewed in December 2023, the The PA also filed a liquidation application but a date has not been set for it to be heard. The Prudential Authority said the Treasury had previously agreed toprovide a guaranteeto help repayIthala’s depositors.
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However, OUTA said that this guaranteenever appearedin the national Budget or in the Medium-Term Budget Policy Statement (MTBPS). It said the sudden move from a guarantee to a full R2.2 billion bailout suggests what OUTA calls “a last-minute scramble by National Treasury to fix another significant bank collapse debacle.” OUTA said while itsupports protecting depositors, it wants answers on why no one is being held responsible forIthala’s failure. “The ultimate question is: why do we not hear of consequence management and accountability for this mess?” OUTA asked.
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