New twist in social grants case

Added by Duncan McLeod on 13 September 2012.
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Net1 UEPS Technologies, the Nasdaq- and JSE-listed technology company that recently won a R10bn tender for the payment of social grants in SA, has won the right to appeal a high court decision that found the tender process was illegal and invalid.

At the same time, Absa subsidiary AllPay, an unsuccessful bidder for the social grants business, has been granted leave to appeal the court’s decision not to set aside the contract, awarded to Net1 subsidiary Cash Paymaster Services (CPS).

The supreme court of appeal in Bloemfontein will now hear the matter.

Last month, the high court in Pretoria ruled the process followed by the SA Social Security Agency (Sassa) in awarding the tender was illegal and invalid, although judge Elias Matojane did not set aside the awarding of the contract to CPS in order to avoid disruption in the payments of social grants.

The contract is for the management of the payment of R500bn in social grants to 14,8m people over a five-year period.

Net1 told shareholders on Thursday that both it and Sassa had won the right to appeal the court’s decision that the process was illegal and invalid. It said the appeal process would not interrupt the company’s right to continue with the contract.

AllPay filed legal papers against the awarding of the tender to CPS, claiming the process was riddled with irregularities. AllPay argued that the terms of the tender were changed shortly before the tender process closed and that its score was lowered to ensure CPS would win.

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