NGOs want ombud to investigate $107m investment in Net1's CPS

Three non-governmental organisations (NGOs) have filed a complaint about an investment of $107-million in Net1 UEPS Technologies.

Corruption Watch‚ Black Sash and Equal Education filed their complaint with Compliance Advisor/Ombudsman (CAO) of the International Finance Corporation (IFC) on Monday. The IFC is a member of the World Bank Group.

The NGOs requested the CAO to investigate the investment‚ because it was “made despite the existence of overwhelming evidence of unlawful and unethical practices involving Net1 subsidiaries”.

IFC invested the $107-million on April 1 2016.

The NGOs said in a statement: “It is quite clear that evidence of unethical and potentially unlawful conduct by CPS existed at the time at which the IFC made its investment and that there were several pieces of pending litigation involving CPS.”

The South African Social Security Agency (Sassa) awarded a five-year tender to Net1 subsidiary Cash Paymaster Services (CPS) in 2012 to distribute social grants.

In 2013 the Constitutional Court declared the tender unlawful and invalid in. However‚ the court ordered CPS to continue distributing social grants until the end of their five-year period to provide Sassa time to find another provider to distribute social grants or pay it themselves.

The NGOs want CAO to investigate: - Unauthorised and fraudulent deductions from the social grants of beneficiaries to the benefit of Net1 subsidiaries; - Unlawful and unethical use of social grant beneficiary data and information; - Allegations of corruption and unethical business practices; and - Constitutional Court findings implicating Net1 subsidiaries in unethical business practices.