Ithala a piggy bank for politically connected, say opposition leaders
Ithala Bank is sinking under the weight of financial mismanagement, dodgy loans worth hundreds of millions of rands, extravagant spending and failure to comply with at least three laws, a series of damning reports show, according to Business Times.
It notes that the beleaguered government lender, funded by KwaZulu-Natal taxpayers, is meant to uplift the province's poor by providing loans to small businesses and entrepreneurs. Instead, says the report, it has been described by opposition leaders as a piggy bank for the politically connected after lending small fortunes to companies linked to prominent figures. According to the report, these include Prince Sifiso Zulu, KwaZulu-Natal Premier Zweli Mkhize, the bank's suspended CEO and former provincial treasurer Sipho Shabalala and ANC MP Sizani Dlamini-Dubazana. More bigwigs are linked to companies contributing to this year's R322m write-off revealed in the latest Auditor-General's report on Ithala. The financial statements signed off by Shabalala show loans of R140m were granted to Ithala management, with R86m in arrears.
Full Business Times report
Just three days after Shabalala was appointed as Ithala's group CEO, he allegedly recommended that a company that was not on the database be awarded a R169m contract without any tender, notes a Business Times report. Shabalala told Ithala's top managers that the company, Bhombe Chitey Construction and Projects, had been approved by KwaZulu-Natal cabinet. The report says a forensic report into the awarding of this multimillion-rand deal to Bhombe Chitey states that Shabalala also told the same meeting that the company 'has done a presentation to then MEC for economic development Zweli Mkhize and he was impressed by their presentation'. The forensic investigation recommended that Shabalala be charged 'for abuse of authority' and 'for violation and transgression of procurement policies and abuse of board's delegation'.
Full Business Times report