The survival of a hydroponic farm in KwaDukuza continues to hang in the balance – one of many local businesses thrown into crisis by the freezing of Ithala’s depositor accounts in January.

The Vella Villa Project has operated at a loss since the Prudential Authority sought the provisional liquidation of Ithala SOC Limited, which, despite functioning as a bank, never held a banking licence. Its exemption under the Banks Act expired in December 2023, yet Ithala defied an October 2024 directive to cease deposit-taking and repay clients within 14 days.

A repayment administrator has been appointed to manage withdrawals, but, legal battles have caused delays, leaving 257 000 depositors uncertain about how much they will recover and when. King Misuzulu kaZwelithini said the Amakhosi of KwaZulu-Natal stand to lose R34-million alone.

Referencing the Repayment Administrator’s solvency report, filed with the Prudential Authority’s court application, the Daily Maverick reported that if Ithala SOC repaid all its depositors today, it would face a shortfall of R1.62-billion. While it holds R2.47-billion in deposits, only R847-million is immediately accessible. The remaining R2.1-billion is tied up in customer loans – and whether those funds can be recovered will determine the bank’s fate.

Also read: KwaDukuza hydroponic farm faces collapse after Ithala Bank shutdown

In March the KZN Treasury announced it had requested a R2.4-billion loan from National Treasury to serve as a security guarantee for Ithala’s deposits. The KZN Treasury also hopes to secure a banking partner for Ithala’s depositors.

Vella Villa Projects founder Mhlengi Ngcobo told the Courier that all his hopes lay in the success of his next harvest, expected in two months’ time.

Without access to the farm’s running capital, Ngcobo was forced to strip down all 10 of his farming tunnels after the produce spoiled, as he could not purchase essential fertilizers and agrochemicals.

“We have made promises to our secure market, and the worst-case scenario would be losing them.”

Starting from scratch, Ngcobo was able to plant tomatoes, spinach and cucumber in four tunnels. Sweet peppers, once a key crop, had to be cut due to budget constraints.

Ngcobo had to retrench five employees in the past three months, leaving only five permanent staff members.

“We are surviving through faith and are frightened that we will not have enough resources to keep us running until our harvest.”

Ngcobo said he has taken loans in his plight to keep the farm afloat, but funds are running dry.

“The farm is in debt, and we need to repay loans should business pick up once again,” he said.

When the Courier visited the farm last Friday, the remaining tunnels were ready for planting, but Ngcobo said he had run out of seed.

People wishing to assist can contact Ngcobo at 076 961 1177.

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