Serge Belamant

Johannesburg - Net1 UEPS Technologies said it’s agreed to pay its founder and chief executive officer an $8 million (R104.5 million) severance payment and an about 14 percent premium on his shares after he agreed to step down amid a storm of controversy over a contract it holds in South Africa to distribute billions of dollars of welfare payments to 17 million people.

Serge Belamant will also be paid $50 000 a month to consult for the company after his early retirement, the company said in a disclosure to the US Securities and Exchange Commission on Tuesday.

Net1 agreed to buy back over 1 million shares he owns at $10.80 a share. It agreed to allow the accelerated vesting of 200 000 shares and the repurchase of more than 252 000 “in-the-money” stock options at $10.80 a share minus the applicable excercise price per option.

The stock closed trade at $9.41 in New York.

Read also: Net1's CE Belamant to retire

Net1 won a contract in 2012 to distribute welfare in South Africa. Two years later, the country’s Constitutional Court ruled the contract invalid and instructed the South African Social Security Agency to find a new provider. When it failed to do so by March this year, the court allowed the contract to be extended until 2018 under stringent conditions.

Net1 has been accused by human-rights organisations of selling goods and services to South Africa’s poorest and least-educated ranging from loans to mobile-phone airtime without explaining the terms and costs adequately and by improperly using information gleaned from its grant distribution activity. It has denied the allegations.