Controversial Cash Paymaster Services (CPS), a subsidiary of dual-listed Net1 UEPS Technologies, yesterday lost its R1.3 billion lawsuit. File photo: African News Agency (ANA)
JOHANNESBURG - Controversial Cash Paymaster Services (CPS), a subsidiary of dual-listed Net1 UEPS Technologies, yesterday lost its R1.3 billion lawsuit against South African Social Security Agency (Sassa).

Judge Robert Nugent dismissed all the claims lodged by the company against Sassa and ordered it to pay the costs of the arbitration.

Sassa spokesperson Paseka Letsatsi said the contract between Sassa and CPS had a history of litigation brought by CPS in an effort to amass maximum and in many cases, unreasonable financial benefit.

“In this case, CPS attempted to monopolise the payment of grants and shut Sapo (SA Post Office) and other commercial banks out.

"The fiscus has been saved a whopping R1.3bn and we are of the belief that this money will be put to good use by the state, which needs every cent in these financially trying times,” Letsatsi said.

CPS had argued that Sassa breached contracts in five provinces that were sealed in 2009 when it moved beneficiaries from receiving their grants at CPS pay points to commercial banks. The affected provinces were the Eastern Cape, KwaZulu-Natal, Limpopo, Northern Cape and North West.

CPS’s main claim was that Sassa was not entitled to pay grants by electronic transfer to bank accounts of beneficiaries.

They further claimed that Sassa was not supposed to pay grants in cash at post offices and other South African Post Office facilities, as well as by electronic transfer to Postbank and other bank accounts of beneficiaries. Sassa was also not entitled to enrol all beneficiaries on its database, CPS claimed.

Nugent found CPS’s arguments held no water. Sassa has already paid CPS R35million in settlement of claims in the North West.

CPS was tasked with the payments of social grants for 17-million people on behalf of Sassa until the Constitutional Court found its contract with the government to be unlawful.

Net1 in a statement said the dispute related to a contract previously concluded in the provinces, which was then taken over by Sassa. Both parties agreed to refer the matter for arbitration.

“It is important to note that there was no quantum with respect to the claim which could only have been determined if the CPS interpretation was correct.

"With the arbitrator’s ruling being in favour of Sassa’s interpretation of the contract, CPS accepts the finding and considers this matter closed,” Net1 said.

Corruption Watch last year also got a favourable ruling from the North Gauteng High Court when the court ordered CPS to pay back R316m - with interest - to Sassa.

Sassa had made the payment to CPS without verifying the work done by the company.

In 2014 CPS claimed that it had enrolled more grant recipients than it had been contracted to enrol. The then-Sassa chief executive officer, Virginia Petersen, accepted the claim by CPS without verifying it.