The Special Investigating Unit (SIU) has been quietly authorised to probe allegations of wrongdoing at Ithala Development Finance Corporation and its wholly owned subsidiary, Ithala (SOC) Limited (Ithala Bank).

This is outlined in Proclamation 243 of 2025 which was signed by President Cyril Ramaphosa on Friday, setting the investigation in motion immediately.

Ithala Bank is already on the brink of closure after the Prudential Authority (PA), a division of the South African Reserve Bank tasked with monitoring banks, applied to the Pietermaritzburg High Court to have it liquidated.

According to the proclamation, the SIU will investigate corruption that took place between 1 January 2017 and the day the proclamation was signed.

“I hereby, under section 2(1) of the Act, refer the matters mentioned in the Schedule, in respect of the Corporation, for investigation to the Special Investigating Unit established by Proclamation No. R. 118 of 31 July 2001 and determine that, for the purposes of the investigation of the matters, the terms of reference of the Special Investigating Unit are to investigate as contemplated in the Act, any alleged serious maladministration in connection with the affairs of the Corporation; improper or unlawful conduct by officials or employees of the Corporation; unlawful appropriation or expenditure of public money or property; unlawful, irregular or unapproved acquisitive act, transaction, measure or practice having a bearing upon State property;

“Intentional or negligent loss of public money or damage to public property; offence referred to in Parts 1 to 4, or section 17, 20 or 21 (in so far as it relates to the aforementioned offences) of Chapter 2 of the Prevention and Combating of Corrupt Activities Act, 2004 (Act No. 12 of 2004), and which offences were committed in connection with the affairs of the Corporation; or unlawful or improper conduct by any person, which has caused or may cause serious harm to the interests of the public or any category thereof,” reads part of the proclamation.

The proclamation also authorises the SIU to pursue those implicated in corruption, recover stolen funds, and return them to the state.

Although the proclamation does not specify which contracts will be investigated, it is understood that SIU investigators will scrutinise the R37 million IT tender awarded to modernise Ithala Bank’s systems.

The company that secured the tender allegedly failed to deliver any work despite being paid in full. Surprisingly, the bank’s board and management took no action to recover the funds. It is believed this was one of the reasons the PA sought the bank’s liquidation, as it posed a risk to the entire South African banking system.

The investigation is also expected to examine the bank’s practice of issuing loans to politically connected ANC individuals and later writing them off as bad debts, even when repayment was possible.