Ithala writes off R126m

ITHALA Bank has written off R126,2million on the cooperative's lending scheme, KwaZulu-Natal economic development and tourism MEC Mike Mabuyakhulu said .

ITHALA Bank has written off R126,2million on the cooperative's lending scheme, KwaZulu-Natal economic development and tourism MEC Mike Mabuyakhulu said .

Ithala is a state-funded KwaZulu-Natal development bank. Mabuyakhulu also said yesterday the bank's loan book was also reviewed by accounting firm KPMG.

This was after it was detected that a lot of co-operatives were failing to sustain themselves.

"Of this R126,2million, R66,9million represented loans written off for the 2009-10 financial year, while R59,3million represented loans written off for the 2008-9 financial year."

In 2008, KPMG was also commissioned to conduct an investigation into the approval of performance loans to 61 clients.

It was also asked to provide a forensic report into the awarding of a R83,4million loan to Dolphin Whispers for the construction of a 56-apartment unit.

"This project collapsed due to poor workmanship and project management," said Mabuyakhulu.

"In March 2009, the forensic investigation by KPMG was submitted. This report found that certain officials had acted negligently on the Dolphin Whispers loan," he said.

The report recommended that disciplinary action be taken against the officials.

He said it was found to be untrue that Ithala only lent money to related parties, such as MECs, members of Parliament and councillors, who were no longer allowed to borrow money from Ithala. Only four such loans still remained.

In 2006, it was reported that May Mashego-Mkhize, the wife of KwaZulu-Natal premier Zweli Mkhize, received a loan of R13million for farming.

Loans were also reportedly granted to various Ithala executives, including its former chief executive officer Sipho Nyembezi.

Meanwhile, Mabuyakhulu also revealed that the Ithala group's chief executive officer Sipho Shabalala had received a written warning for not following tender procedures. - Sapa

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