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Ithala is 'above board'

By unknown | Mar 19, 2009 | COMMENTS [ 0 ]

Canaan Mdletshe

Canaan Mdletshe

The KwaZulu-Natal department of finance and economic development yesterday rejected IFP allegations that Ithala Bank was giving preferential treatment to ANC members.

The department said the bank was for all residents in the province and the allegations were not new and had been bandied about in the media before.

"No undue influence was exerted in the approval of any related party loans and no related party participated in the decision-making process to approve such loans," it said.

The IFP accused current bank officials of awarding loans amounting to R58million to ANC officials and or their relatives.

Included in the IFP benefit list are finance and economic affairs MEC Zweli Mkhize and his wife May, current Ithala chief executive officer Sipho Shabalala and his wife, Pretty Mbanjwa (wife of provincial director-general Kwazi Mbanjwa), former Ithala boss Sipho Nyembezi and key Ithala board members and their relatives.

Mkhize has stated in the past that such transactions were above board and had been "declared".

Ithala boss Shabalala said he "was not commenting".

The department added that the first time the matter of related party transactions came up, it was declared by Ithala in the financial statements as required by accounting standards.

"This disclosure, which formed part of the annual report to Parliament, was debated at length in the legislature and specific resolutions were taken, which Ithala has fully complied with."

It said the client base of Ithala was largely that which was not readily taken as a first choice by commercial banks, and during economic hardship these clients would feel the pressure first.

In 2007 the auditor-general reviewed all related party transactions and confirmed that conditions had been complied with in all related party transactions audited.

From the 2007 financial year to February 28 this year, R536,1million has been advanced by Ithala.

A total of R119,7million has been advanced to co-operatives and R416,4million advanced to small and medium businesses.

Related party loans on February 28 this year amounted to R29,7million, which represents 2,48percent of the total loan book.


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