'Anti-forces' behind Ithala and ArcelorMittal closures: KZN alliance

Repayment administrator 'involved in human rights violations of 257,000 people'

22 January 2025 - 16:51 By LWAZI HLANGU
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Members of the KZN Alliance Secretariat outline their efforts to rail against 'evil forces' threatening to disrupt the social and economic landscape of KwaZulu-Natal.
Members of the KZN Alliance Secretariat outline their efforts to rail against 'evil forces' threatening to disrupt the social and economic landscape of KwaZulu-Natal.
Image: Supplied

The ANC and its alliance partners in KwaZulu-Natal believe there are “anti-forces” associated with attempts to liquidate Ithala bank and the closure of ArcelorMittal, and have vowed to fight these developments.

The secretariat of the alliance — made up of the ANC, SACP, Cosatu and Sanco — provided an update on “new developments” at the ANC's headquarters on Wednesday.

Among their main focus points were the liquidation of Ithala bank, the closure of ArcelorMittal Metal in Newcastle and unrest in Ray Nkonyeni local municipality on the KZN south coast.

The alliance stressed its opposition to the Prudential Authority’s (PA) application to the Pietermaritzburg high court for the liquidation of the bank.

“We believe that the repayment administrator is involved in gross human rights violations of 257,000 people and more than 5-million family members and relatives, who will now have no access to their money and putting so much financial hardships on their families,” said ANC provincial secretary Bheki Mtolo.

He said the repayment administrator had told all Ithala service providers to halt their operations, leaving families without access to their money and putting more than 400 workers at risk of losing their jobs.

The alliance conceded the bank had not been run smoothly and interventions were needed. It has been flagged numerous times by parliament's standing committee on public accounts on allegations of maladministration, fraud and corruption.

“Our view is that any form of corruption or financial mismanagement must be attended to separately by relevant crime fighting agencies without collapsing this financial institution.”

SACP provincial secretary Themba Mthembu said there had been numerous reports that the bank had been a “piggy bank” for the political elite and that the justice system failed to protect it. He said, however, that shutting it down would mean punishing depositors rather then protecting them.

Mthembu believes the move to liquidate the bank was an attempt to “defend competition to the bigger banks”.

“The claim that liquidation is to protect depositors is a lie. Closing Ithala bank will punish the depositors rather than protect them. That is why we’re going to take this up with mass action to protect Ithala and all those people who were beneficiaries of the working-class friendly bank and all our stokvels,” he said.

“Whatever is happening at Ithala is political: there is a history of trying to stop emerging banks from competing with the big banks. It’s like the issue of tuck shops — there is a bigger agenda [in which] the big retail industry wants the R140bn market.”

Edwin Mkhize, Cosatu provincial secretary, added: “As revolutionary forces in this country we have been advocating for a state bank and Ithala was [moving in] the direction of a state bank.

“All the challenges Ithala faced should’ve been addressed amicably with the aim of helping it, rather than collapsing it, because the majority of the depositors are poor people. There are communities where Ithala is the only bank.”

To express their opposition,  the alliance will embark on mass action protests against the repayment administrator, starting with a picket outside the Pietermaritzburg high court on Friday.

On the same day, the alliance partners will stage another picket outside the ArcelorMittal plant in Newcastle. This will be in opposition to the impending closure of the furnace in the northern KZN community.

Mtolo noted that closure would result in the loss of more than 1,300 direct jobs, an estimated 2,000 indirect jobs in surrounding communities and would cause a ripple through the entire steel and motor manufacturing sectors.

“The consequences will be felt for generations to come, as the skills and expertise developed over decades are lost forever.”

He conceded the company had made valid complaints about the government, including with regards to load-shedding and the rapid rise of electricity tariffs which posed a danger to industry and intensive users for years. However, he denied their claim that government had not responded or provided support over the years.

He said the closure of the Newcastle operations should be treated as a societal issue that required a collective response to the entire steel industry, the government, banks, labour and communities.

Mkhize said there had been reports of companies using their influence as mass employers to threaten the government into covering their bills for them.

“We’re concerned about the trend in our country where some of the big companies want to abuse government because they know SA is facing a huge challenge of unemployment. They want to abuse the government and threaten to close down so the government can take taxpayers' money and bail them [out].”

He said the government should thoroughly research their books to see if these challenges are things the company can overcome themselves, or if more measures would be needed to save jobs and possibly the company itself.

TimesLIVE


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