Thami Magubane|Published42 minutes agoIthala SOC Limited Board Resigns Amid Governance Failures

The KwaZulu-Natal government says the resignations come amid ongoing governance, compliance and operational challenges at Ithala SOC Limited, a subsidiary of the Ithala Development Finance Corporation. The Board of Directors of Ithala SOC Limited (bank) has fallen on its sword amid calls for the leadership to face consequences over the bank’s governance failures that have brought the institution to the brink of collapse. The Premier’s office revealedyesterday that board members of Ithala SOC Limited, a subsidiary of the Ithala Development Finance Corporation, had resigned, and their resignations were received and processed during the recent Annual General Meeting (AGM) of the institution.

The resignations came after the provincial government made it clear that there should be consequence management against all those who failed in governance, including securing the bank’s banking licences. The board consisted of five members, and they have all resigned. Economic experts have called for the new board that will be appointed to prioritise stabilising the development bank.

Premier Thami Ntuli emphasised that these resignations must be understood within the broader context of the decisive interventions being undertaken by the provincial government to stabilise and reposition Ithala as a credible, resilient, and forward-looking financial institution that serves the developmental aspirations of the people of KwaZulu-Natal. He noted that the government has a clear appreciation of the governance, compliance, and operational challenges that have confronted the institution over time and is now firmly focused on implementing practical and sustainable solutions that will restore stability and rebuild public confidence. “As government, our objective is clear: to move Ithala from a state of recurring crises towards becoming an agile, responsive, and sustainable developmental institution capable of advancing financial inclusion, supporting small enterprises, and contributing meaningfully to inclusive economic growth across the province,” said Ntuli.

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“We are fully aware that communication with stakeholders has not always been at the level required, and we are determined to correct that. Communicating with stakeholders is not an option; it is a responsibility. Going forward, we will communicate more proactively and more consistently.

We will begin with our employees, who are the daily ambassadors and custodians of the institution. We will strengthen engagement with traditional leaders and communities, and we will work closely with all relevant regulatory and oversight institutions because we are committed to transparency and social accountability,” he said. The provincial government said it will continue to act with urgency, discipline, and foresight to ensure that Ithala emerges stronger, properly governed, and fully aligned with its historic mandate as a financial institution of the people.

Further announcements regarding governance reforms and stabilisation measures will be communicated in due course. Dawie Roodt, an economist, said a new board will need to ensure that the bank is stabilised and start the process of “privatising this bank.” He noted that this is a very difficult thing to do because of political opposition to it. “Politicians often want to maintain control over banks and businesses.” He added that it may be best for the bank to be privatised and left to the private sector completely, but that is unlikely to happen because of political ideologies. Mafika Mndebele, chairperson of the Portfolio Committee on Economic Development and Tourism in the KwaZulu-Natal Legislature, said the committee notes the recent developments concerning the resignation of board members of Ithala SOC Limited, as announced by the office of the Premier.

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