Dual-listed Net1 UEPS says the North Gauteng High Court has granted it leave to appeal the judgment handed down last month, in which it was found that a social security grant was not properly awarded.
On 28 August, judge Elias Matojane ruled the R10 billion tender awarded by the South African Social Security Agency (SASSA) to Net1 subsidiary, Cash Paymaster Systems (CPS), on 17 January, was illegal.
Matojane ruled that the contract will remain in place to make sure millions of South Africans continue receiving grants. As a result, the contract will remain in place until it is reissued.
Net1 won the tender to provide a payment solution for about 15 million grants to 10 million South Africans across the country. It previously said it was delighted with the High Court's decision to “validate its agreement”.
Back to court
Net1 says in a statement to shareholders that CPS and SASSA have been granted the right to appeal the ruling that the tender process was illegal and invalid, and granted AllPay, an unsuccessful bidder and the applicant in the initial matter, leave to appeal the ruling that the contract between SASSA and CPS should not be set aside.
regulations and laws. Net1 previously had a contract to distribute grants in five of SA's nine provinces, while AllPay handled payments in the Free State, Western Cape, Gauteng and Eastern Cape for a decade.
Net1 says the appeal will now be heard by the Supreme Court of Appeal, as soon as it has scheduled a date for the proceedings. The appeal process could take several months to be finalised, it says.
“The appeal process does not interrupt Net1's right to continue with the execution of the contract with SASSA and the company remains committed to deliver a high-quality service to SASSA and its grant recipients.”
Trimming fraud
Social development minister Bathabile Dlamini last month explained that the new biometric payment system was introduced this year to improve service delivery and cut down on fraud.
“SASSA identified weaknesses in the methodology of payment, which resulted in, among other deficiencies, duplicated payments, payments to persons who were not eligible beneficiaries, and other fraudulent conduct, which had an adverse impact on the budget allocated by Parliament, for social grants to persons who qualified.”
Dlamini said because of the deficiencies in the system, SASSA continued to receive adverse and qualified audit opinions from the office of the auditor-general. “The means to ensure an improved beneficiary experience was to provide an automated biometric payment solution to reduce inconsistent reviews and a tedious life certification process.”
SASSA went to tender on 15 April last year and finally awarded the deal in January.
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