Johannesburg - Embattled Net1 UEPS Technologies on Friday said it had signed an addendum with the South African Social Security Agency (Sassa) giving effect to the Constitutional Court's ruling that it must continue paying social grants for a period of a year.
More than 10 million grants recipients had run the risk of not receiving their April grants after Sassa had dragged its feet for nearly two years in finding a new service provider as per the Constitutional Court 2015 ruling that declared the contract between Sassa and Net1’s subsidiary Cash Paymaster Services (CPS) invalid.
Net1 said the payment of April grants to recipients was on track and affirmed its commitment to uninterrupted service delivery.
“The addendum extends the existing contract for a period of 12 months to March 31, 2018, under the current contract’s terms and conditions, and also includes the specific terms as ordered by the Constitutional Court of South Africa in its March 17, 2017, ruling,” said Net1.
Net1 has a primary listing on the Nasdaq index and a secondary listing on the Johannesburg Stock Exchange.
Last month, the Constitutional Court ruled CPS and Sassa must continue paying social grants for a period of a year, until a suitable bidder was found. The court further ordered CPS to release detailed statements on its finances. CPS’s initial five year contract that was signed in 2012 was in 2015 declared invalid by the Constitutional Court. However, it was allowed to continue paying the grants to give Sassa enough time to get a new service provider.
A new company was supposed to take over the operations from the beginning of April. Matters came to a boil last month after it became clear that Sassa had not abided by the court's earlier decision to find a new service provider which left 17 million grants recipients in a lurch.
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The social grants payments, which amount to more than R140 billion a year, are a signature policy of the governing ANC.
Last week Parliament’s Standing Committee on Public Accounts (Scopa), said the committee would keep a close eye on how the social grants process unfolded.
The company’s second biggest shareholder, Allan Gray, had previously said it was considering recalling the board of Net1 after the social grants saga.
Net1 shares were 3.53 percent up on the JSE on Friday to close at R161.50.