Call to probe loans

2008-04-06 00:00

Members of the provincial legislature’s finance portfolio committee have appealed for a further debate on the the controversial loans issued by Ithala bank to top provincial government officials and their family members.

The request follows revelations contained in Ithala’s internal audit investigation report on the matter.

The report, circulated to committee members on Friday, states that the investigation found “no evidence of either conflict of interest or undue influence in the awarding of the loans” granted to related parties.

But the report paints a dismal picture of the performance and repayment of the loans. It is stated in the report that 11 (35%) of the 31 loans awarded to “related parties” are in arrears.

The beneficiaries of the loans, which amount to R58 million, include the wives of certain MECs and those of top-ranking government officials.

The names of the beneficiaries will not be made public because of bank-client confidentiality.

Finance committee member and DA caucus leader, Roger Burrows, said a debate on the matter is crucial.

“The KZN government is the 100% shareholder of Ithala. We’ve got to have a debate not only on the legality of the transactions, but on the perceptions of influence and interest, despite what the audit report says. This is the debate we need to have and in which the [finance] MEC needs to participate in fully.”

Another committee member, Jo-Ann Downs, raised a concern on whether the entity’s internal audit was the best vehicle to conduct such an investigation.

Responding to questions from the committee, Finance and Economic Development MEC Zweli Mkhize welcomed the debate on the issue while stating that he will be consulting with the auditor-general on an investigation into the loans issued.

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