Net 1 Makes Further Statement Regarding U.S. Government Investigations
05 Dezember 2012 - 8:19AM
Marketwired
Net 1 UEPS Technologies Inc. (NASDAQ:UEPS)(JSE:NT1). On December 4,
2012, we made public disclosure through a filing with the
Securities and Exchange Commission ("SEC") that we have received
letters from the U.S. Department of Justice, Criminal Division
("DOJ") and the SEC informing us that they are conducting
investigations concerning our company. We recognize that the
announcement of these investigations raises questions and concerns
about our company and our SASSA contract.
As a preliminary matter, we believe that it is important to note
that these investigations are investigations and not findings of
wrongdoing on the part of any person and that we are fully
cooperating with the investigations.
We want to assure our stakeholders that we are continuing to
provide the South African government with our payment delivery
service to the millions of South Africans who depend on us to
deliver their social security grants in a timely and efficient
manner and that we have no reason to believe that these
investigations will impact our ability to continue to do so.
These investigations appear to be directed at matters which are
similar to those that were the subject of articles which appeared
in various South African newspapers after AllPay Consolidated
Investment Holdings (Pty) Limited ("AllPay") instituted legal
proceeding in the South African courts to set aside the contract
awarded to us in January 2012 by SASSA. AllPay was an unsuccessful
bidder for the SASSA contract. The litigation and allegations are
summarized below.
-- AllPay launched an application out of the North Gauteng High Court,
Pretoria on February 8, 2012. The application consisted of two parts,
parts A and B. Part A was an urgent application for an order
interdicting SASSA and us from taking any steps to implement the tender
award, pending the outcome of part B, which was an application for an
order reviewing and setting aside the award of the tender and service
level agreement entered into pursuant thereto.
-- Part A was scheduled for a hearing on February 21, 2012. On the hearing
date, AllPay abandoned part A of the application and approached the
Deputy Judge President for a preferred hearing in respect of part B.
-- The hearing of part B was originally scheduled for April 11 to 13, 2012
but was rescheduled to May 29 to 31, 2012.
-- Subsequent to AllPay having launched its court application, articles
appeared in South African newspapers, most prominently The Mail and
Guardian and The Sunday Independent, containing allegations of
corruption in relation to the tender award. AllPay, whom we believe was
responsible for instigating these allegations, was unsuccessful when it
attempted to introduce the articles' allegations into the court record.
-- In late August 2012, the court declined to set aside our contract but
ruled that the process followed by SASSA was illegal and invalid. The
court also awarded costs of various aspects of the case against AllPay,
SASSA and us.
-- After the High Court ruling, AllPay sought to have the Constitutional
Court of South Africa hear an urgent appeal of the High Court's
judgment, which was rejected by the Constitutional Court on the basis
that it was not in the interest of justice to hear the matter at this
stage.
-- We, SASSA and AllPay have appealed the High Court's ruling to the South
African Supreme Court of Appeal. This appeal is expected to be heard
during the first court term of 2013, although no date has been set yet.
-- In September 2012, AllPay complained to the JSE Limited ("JSE") that our
disclosures concerning these matters were inadequate or inaccurate. The
JSE rejected AllPay's claim and its subsequent request that the ruling
be reconsidered.
As is customary, we do not intend to comment further until the
investigations have been concluded.
About Net1 (www.net1.com)
We are a leading provider of alternative payment systems that
leverage our Universal Electronic Payment System, or UEPS, to
facilitate biometrically secure real-time electronic transaction
processing to unbanked and under-banked populations of developing
economies around the world in an online or offline environment. In
addition to payments, UEPS can be used for banking, healthcare
management, payroll, remittances, voting and identification.
We operate market-leading payment processors in South Africa,
Republic of Korea, Ghana and Iraq. In addition, our proprietary
Mobile Virtual Card technology offers secure mobile payments and
banking services in developed and emerging countries.
We have a primary listing on the Nasdaq and a secondary listing
on the JSE Limited.
Forward-Looking Statements
This announcement contains forward-looking statements that
involve known and unknown risks and uncertainties. A discussion of
various factors that cause our actual results, levels of activity,
performance or achievements to differ materially from those
expressed in such forward-looking statements are included in our
filings with the Securities and Exchange Commission. We undertake
no obligation to revise any of these statements to reflect future
events.
Contacts: Net 1 UEPS Technologies Inc. Dhruv Chopra Vice
President of Investor Relations +1-212-626-6675dchopra@net1.com
www.net1.com
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