IFP Vehemently Opposes Liquidation of State-Owned Ithala

• The Inkatha Freedom Party has called for the government to remove Johannes Kruger, who the Reserve Bank employed to investigate the Ithala Bank
• The Reserve Bank's Prudential Authority (PA) applied for the State-Owned Company to be liquidated
• The IFP is crying foul and is accusing the PA's repayment administrator of interfering in the bank's matters

With nine years of experience, Tebogo Mokwena, a Briefly News current affairs journalist, provided insights into infrastructure challenges and state-owned enterprises in South Africa at Daily Sun and Vutivi Business News.

KWAZULU-NATAL — The Inkatha Freedom Party (IFP) is fighting to prevent the liquidation of state-owned Ithala. This was after the South African Reserve Bank's Prudential Authority (PA) filed provisional liquidation papers at the Pietermaritzburg High Court on 16 January 2026.

What says the IFP?

The IFP's spokesperson, Mkhuleko Hlengwa, called on the KwaZulu-Natal provincial government, Ithala's majority shareholder, to step in and prevent the liquidation. IFP's founder and former president, Prince Mangosuthu Buthelezi, founded the bank in 1958. He died in September 2023.

Read also

Government seeking solutions to prevent ArcelorMittal's workforce job losses

Hlengwa also demanded that Johannes Kruger, whom the PA employed as the bank's Repayment Administrator, be sacked. He said a court ruling restrained the Repayment Administrator from interfering in the bank's daily operations. The Economic Freedom Fighters' KZN chairperson Mongezi Thwala said the bank aided black people and protected them from financial discrimination. ActionSA's Alan Beesley said its liquidation would mean another SOE has failed.

Why is Ithala facing liquidation?

The PA announced on 16 January that Ithala faced regulatory and financial challenges. Although not granted a banking license, it operated under a special exemption and has 257,000 account holders in 38 branches across KZN. Its assets are worth R8.2 billion, and R2.5 billion belonging to account depositors.

The Reserve Bank appointed a Repayment Administrator in 2023. The Administrator found that Ithala is legally and technically insolvent and that the KZN provincial government didn't provide capital commitments. Furthermore, the PA gave it repeated extensions to regularise its operations until a final notice was issued in 2022. By then, Ithala had failed to comply with the conditions.

Read also

Nontando Nolutshungu replaces Floyd Shivambu as EFF Chief Whip in Parliament

VBS, another collapsed bank

Another bank that faced a similar fate was VBS Mutual Bank. It was placed into liquidation in 2018 after investigations into its operations revealed widespread corruption. Politicians, including former Justice Minister Thembi Simelane and former EFF deputy president Floyd Shivambu, have been implicated in its looting.

South Africans weigh in

Netizens on Facebook discussed what was happening with Ithala.

Tumisang Mamabolo said:

"Check which politician has benefitted."

Nono Hlubi said:

"They were operating under Absa Bank. They don't have a license to do some work independently."

Yanga Somila said:

"All SOEs are utter nonsense. Why can't they hire competent people instead of comrades?"

Bernice Abrahams asked:

"How will this failure affect SA's banking rating overseas?"

Simmone Bouch said:

"Another VBS story coming."

Royal AM faces liquidation

In another story, Briefly News reported that Royal AM faces liquidation for failing to meet salary obligations. The club also faces an R40 million tax debt following investigations into club owner Shauwn Mkhize.

Read also

MK Party treasurer general resigns, South Africans not surprised

Mkhize has been under the microscope since she allegedly failed to pay her taxes. The club also was unable to pay salaries. Team members refused to play a fixture in 2024 after their wages were unpaid.

Source: Briefly News