The US Department of Justice's criminal and fraud unit has closed its investigation into Net1 UEPS Technologies relating to allegations of violation of the Foreign Corrupt Practices Act (FCPA).
The US investigation sought to determine allegations of corruption involving Net1, following the award of the South African Social Security Agency (SASSA) national contract to the company.
Net1, through its subsidiary Cash Paymaster Services (CPS), distributes social grants on behalf of SASSA. In recent months, Net1 and CPS have also faced public scrutiny with regards to the social grants debacle.
In a letter to Net1, the DOJ says based on the information available to it at this time, it has closed the inquiry. However, the department notes it "may reopen its inquiry" if it learns additional information.
In a statement, the alternative payments company welcomed the news, saying the receipt of the letter from the DOJ concludes the US government's investigation into the matter, which commenced in 2012.
According to Net1, the probe was initiated as a result of one of the losing bidders for the SASSA contract, Barclays Africa's subsidiary AllPay, "referring unsubstantiated South African press articles to the DOJ, alleging or implying that the SASSA tender process was tainted by corruption" involving CPS.
This resulted in the DOJ and US Securities and Exchange Commission (SEC) announcing investigations into alleged FCPA and disclosures violations in November 2012, says Net1.
In 2015, the SEC informed Net1 it had concluded its investigation and it did not intend to recommend an enforcement action against the company.
Net1 also approached the South African Police Service's Commercial Crimes Unit to investigate the allegations of corruption. The prosecutors assigned to the case declined to prosecute these matters and the investigation was closed, according to the company.
"We co-operated with all government agencies and other regulatory bodies regarding these allegations, as well as the extensive investigations that followed over the last four-and-a-half years," says Herman Kotz'e, CEO of Net1.
"The closure of the DOJ investigation concludes a lengthy, arduous and costly exercise involving government agencies in the US and SA, including the DOJ, SEC and the Hawks.
"This letter from the DOJ is the final step to clear our name, and is consistent with the total absence of any findings of irregularities against us by any United States or South African court or regulator, the SEC or the Hawks. We will continue to focus our energies and resources on the expansion of our businesses in South Africa and internationally," he concludes.
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