The Pietermaritzburg High Court in KwaZulu-Natal has ruled that Ithala SOC Ltd (the bank) can continue operating pending an appeal in the Supreme Court of Appeal by the administrator, providing temporary relief for the bank’s customers and employees.
In a court ruling handed down today, 9 May 2025, the court ruled in favour of Ithala following a dispute over the powers of Johan Kruger, the Repayment Administrator, who has taken over the operations of the bank following his appointment by the Prudential Authority (PA) pending a liquidation process, which is a separate matter pending in court.
Today’s ruling follows court proceedings that were held in the Labour Court in Durban on March 17, 2025.
The court also ruled that the appointment of Kruger, in terms of section 84 of the Bank Act 94 of 1990, does not affect the normal operations of Ithala SOC Limited as it does not constitute deposit-taking as contemplated in section 1 read with section 84 of the Banks Act.
The high court further declared that Kruger does not have operational and management control over the day-to-day operations of Ithala SOC Limited, which do not amount to the business of a bank or constitute deposit-taking activities.
“It is declared that the first respondent (Kruger), in his capacity as Repayment Administrator, has no authority to take over the human resources, treasury, market, finance, and any other operational functions of Ithala SOC Limited, including the removal of Ithala authorised signatories to the bank accounts used for purposes of these functions,” reads the ruling.
Currently, over R2 billion is frozen with Ithala Bank, and struggling depositors are unable to access their money. Ithala staff were also struggling to get their salaries after Kruger took over the operations of the historic KwaZulu-Natal bank.
Francois Rodgers, the MEC for the KwaZulu-Natal Treasury, which has been fighting the battle alongside Ithala and the provincial government, has welcomed the ruling, saying they have always maintained that Kruger was not acting in the best interests of the depositors.
“We have always contended that Mr. Kruger has never acted in the best interests of Ithala and its retail depositors. It should be remembered that this is the second time that Judge (Muzi) Ncube has affirmed that Mr. Kruger has overstepped his powers. Unfortunately, we are concerned that some of the damage caused by his actions may prove impossible to reverse,” Rodgers said in a statement after the ruling.
