After the Bell: Why SA’s state bank ambition is dead in the water
Another state-owned enterprise (SOE) has gone down the tubes. It’s a blight for the state-owned entity universe and further underscores the government’s woeful track record at running things.
Source: Pexels
The failure of Ithala, the development financier owned by the KwaZulu-Natal government, is another reminder of why the government’s much-vaunted plan of launching a fully fledged state bank is lofty and a bad idea.
To recap, Ithala is facing a liquidation application in court from the SA Reserve Bank’s Prudential Authority, which regulates banks and other financial institutions in South Africa. The Prudential Authority has been worried about Ithala’s governance affairs and has been patient with it for years. Ithala has been operating under the radar as its financial status remained unknown, and it was even unknown how at risk the company was of collapsing.
Read the full article on Daily Maverick here.