Net1 announces that CPS/SASSA increased price not subject to Constitutional Court endorsement
December 06 2018 - 4:05PM
Net 1 UEPS Technologies, Inc. (“Net1” or the “Company”) today
announced that it has received an order from the Constitutional
Court of South Africa (“Constitutional Court”) regarding the
determination of fees and payment between the Company’s subsidiary,
Cash Paymaster Services (“CPS”), and SASSA.
In its previous order handed down on March 23,
2018, among other things, the Constitutional Court ruled:
2. |
It is declared that, for
the period of six months from 1 April 2018, SASSA and CPS are under
a constitutional obligation to ensure payment of social grants to
beneficiaries who are paid in cash. |
|
|
4. |
SASSA and CPS must ensure
that for the period of six months from 1 April 2018 payment of
social grants is made to beneficiaries who are paid in cash on the
same terms and conditions as those in the current contract between
them. |
|
|
4.1 |
CPS may in writing request
National Treasury during the six month period to investigate and
make a recommendation regarding the price to be paid for the
service it is to render in terms of paragraph 4 of this order. |
4.2 |
National Treasury must
file a report with this Court within 21 days of receipt of the
request setting out its recommendation. |
SASSA interpreted the above order to imply that
the Constitutional Court had to rule specifically on the matter in
order for them to adopt the Treasury recommended rate (excluding
VAT) of ZAR 44.35 for cash payments and ZAR 16.94 for biometric
payments performed by CPS, versus the previously contracted rate of
ZAR 14.42.
The Company accordingly filed an urgent
application on August 22, 2018 with the Constitutional Court to
obtain the Court’s endorsement of the Treasury recommended
rate.
The Constitutional Court has now ordered that it
will not consider the urgent application, on the basis that “it is
not in the interest of justice to hear it because nothing prevents
the parties from coming to an agreement on increased payments
without court sanction, and if they do not, normal legal processes
in other courts must be filed to determine the effects.”
“We welcome the Constitutional Court
clarification that its consent is not required to finalize the
pricing for the last six months of the contract between CPS and
SASSA,” said Herman Kotzé, CEO of Net1. “We look forward to
engaging directly with SASSA to finalize our remuneration in
accordance with the Treasury recommendation for the six-month
period ending September 30, 2018, and bringing the
six-and-a-half-year contract to its conclusion,” he
added. About
Net1 (www.net1.com)
Net1 is a leading provider of transaction
processing services, financial inclusion products and services and
secure payment technology. Net1 operates market-leading payment
processors in South Africa and the Republic of Korea.
Net1 offers debit, credit and prepaid processing and issuing
services for all major payment networks. In South Africa, Net1
provides innovative low-cost financial inclusion products,
including banking, lending and insurance, and is a leading
distributor of mobile subscriber starter packs for Cell C, a South
African mobile network operator. Net1 leverages its strategic
equity investments in Finbond and Bank Frick (both regulated
banks), and Cell C to introduce products to new customers and
geographies. Net1 has a primary listing on NASDAQ (NasdaqGS: UEPS)
and a secondary listing on the Johannesburg Stock Exchange (JSE:
NT1). Visit www.net1.com for additional information about Net1.
Forward-Looking Statements
This press release contains forward-looking
statements that involve substantial risks and uncertainties. All
statements, other than statements of historical fact, included in
this press release regarding strategy, future operations, future
financial position, future revenues, projected costs, prospects,
plans and objectives of management are forward-looking statements.
The Company may not actually achieve the plans, intentions or
expectations disclosed in its forward-looking statements. Actual
results or events could differ materially from the plans,
intentions and expectations disclosed in the forward-looking
statements that the Company makes. Factors that might cause such
differences include, but are not limited to: SASSA’s
interpretation of the Constitutional Court’s order; other
factors, many of which are beyond the Company’s control; and other
important factors included in the Company’s reports filed with the
Securities and Exchange Commission, particularly in the “Risk
Factors” section of the Company’s Annual Report on Form 10-K for
the fiscal year ended June 30, 2018, as such Risk Factors may be
updated from time to time in subsequent reports. The Company does
not assume any obligation to update any forward-looking statements,
whether as a result of new information, future events or
otherwise.
Investor Relations
Contact:Dhruv ChopraHead of Investor RelationsPhone:
+1-917-767-6722Email: dchopra@net1.com
Media Relations Contact:Bridget
von HoldtBusiness Director – BCWPhone: +27-82-610-0650Email:
bridget.vonholdt@bm-africa.com
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