The ANC in KwaZulu-Natal says it will return the R1-million donation it received from suspended Ithala Bank CEO Sipho Shabalala if it was the proceeds of crime.

ANC provincial secretary Sihle Zikalala said yesterday the ruling party was prepared to return the money immediately and without any hesitation if it was gained through criminal activities.

"We wish to place on record that the ANC receives donations like all other political parties, and if a person donates, he does not provide an account of where he got the money. Indeed, if it is proven that the ANC has received any donation from someone who got the money through criminal activities, we will give it back," he said.

Shabalala's arrest is said to be imminent, and he is expected to be charged with fraud, corruption and money laundering.

He is accused of receiving kickbacks from Uruguayan businessman Gaston Savoi in exchange for provincial government contracts.

Savoi and seven others, including top local government officials, were arrested last week.

Assets worth R200-million were seized during early morning raids in Pietermaritzburg, Durban and Cape Town.

It is claimed the accused grossly inflated the price of water-purification plants and oxygen machines sold to the KwaZulu-Natal and Northern Cape health departments.

Following the arrests, opposition parties lambasted the ANC for accepting a donation from Shabalala. The ANC could not say yesterday whether the donation would be given back to Shabalala or to the state if he was found guilty.