South African Reserve Bank wins High Court appeal setting aside execution order in Ithala repayment administrator dispute

The South African Reserve Bank published a KwaZulu-Natal Division High Court judgment in the Ithala SOC Limited matter in which the South African Reserve Bank and its Prudential Authority, together with the Repayment Administrator it appointed, succeeded on appeal under section 18(4) of the Superior Courts Act. The court upheld the appeal and set aside the section 18(3) execution order that had given immediate effect to relief obtained by Ithala pending further appeal proceedings, and ordered Ithala and two KwaZulu-Natal provincial respondents to pay costs. The set-aside execution order had kept in force declarations that the Repayment Administrator’s appointment under section 84 of the Banks Act did not affect Ithala’s normal operations that are not deposit-taking, and that he had no authority to assume day-to-day operational control over functions such as human resources, treasury and finance outside the deposit-taking context. It also included interdictory relief relating to Absa Bank’s processing of specified transactions on Ithala’s accounts and restrictions on instructions the Repayment Administrator could issue to Ithala’s bankers and service providers. The litigation is set against the expiry on 15 December 2023 of Ithala’s exemption to accept public deposits, subsequent directives to repay monies obtained contrary to the Banks Act, and a liquidation application filed on 15 January 2025 after the Repayment Administrator established that Ithala was technically and legally insolvent. Leave to appeal the underlying November 2024 judgment to the Supreme Court of Appeal is referenced, with those proceedings continuing separately from the section 18 execution dispute.