Serge Belamant

Johannesburg – Dual-listed Net1 UEPS Technologies, which has come under scrutiny over its welfare deal, is splitting its Chairman and CEO roles.

In a statement issued on Friday, the company – listed on the Nasdaq and the JSE – said it was splitting these roles “in recognition of the growing practice of US public companies, as well as the customary practice of South African public companies, to have the Chairman be an independent director”.

It says its board “has come to believe that separating the roles of Chairman and Chief Executive Officer is the appropriate corporate governance model for the company at this time, especially given its secondary listing on the JSE and its significant South African institutional shareholder base”.

Towards the end of March, Bloomberg reported that Allan Gray, the second-biggest shareholder in Net1, said it will work with the company’s board after it highlighted concerns about its communication with its investors about deductions it makes from the welfare checks of clients in South Africa.

Net1 says it has appointed Christopher Seabrooke as Chairman, while Serge Belamant has resigned as chairman but will remain a director and CEO.

Seabrooke has been a director of Net1 since 2005, and chairs several of its committees. He holds degrees in Economics and Accounting from the University of Kwa-Zulu Natal and an MBA degree from the University of the Witwatersrand.

Net1 adds Seabrooke is a “highly experienced director, having been chairman or a director of over 25 stock exchange quoted companies over the past 30 years” and is currently CEO of Sabvest.

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Net1 says its board is also actively seeking to appoint additional independent directors, at least one of which will be a person designated by the International Finance Corporation.

On March 17, South Africa’s Constitutional Court ordered the South African Social Security Agency to extend Net1’s contract, which it had previously ruled invalid, to distribute monthly grants to more than 17 million people for a year to avoid an interruption to the disbursement of more than R150 billion in payments a year.

Net1, which won the deal in 2012, has been accused by human rights groups of making illegal deductions from the checks for goods and services its subsidiaries sell. It has denied the allegations.

“Allan Gray has written two letters to Net1’s board,” Andrew Lapping, the fund manager’s chief investment officer, said in an interview with Bloomberg in March. “Allan Gray wants to drive change from inside rather than a hostile way from outside.”