South African Constitutional Court Pronounces Remedy for SASSA Tender
17 April 2014 - 3:00PM
Marketwired
South African Constitutional Court Pronounces Remedy for SASSA
Tender
JOHANNESBURG, SOUTH AFRICA--(Marketwired - Apr 17, 2014) - Net 1
UEPS Technologies Inc. ("Net1" or the "Company")
(NASDAQ:UEPS)(JSE:NT1) today announced that the South African
Constitutional Court ("Constitutional Court") has ruled on the
appropriate remedy following its declaration on November 29, 2013,
that the tender process followed by the South African Social
Security Agency ("SASSA") in awarding a contract to Net1's wholly
owned subsidiary, Cash Paymaster Services Proprietary Limited
("CPS"), was constitutionally invalid. The Constitutional Court is
the highest court in South Africa and the full judgment is
available on the Company's website at www.net1.com.
The Constitutional Court has ordered the following remedy:
- The declaration of invalidity of the contract between SASSA and
CPS is upheld, but suspended until a new tender has been awarded in
accordance with 2 below, or for the remainder of the existing
contract period if no tender award is made in accordance with 4
below.
- SASSA has to initiate a new tender process during the next 30
days. The request for proposal for the new tender must contain
adequate safeguards to ensure that no loss of lawful existing
social grants occurs, the payment of lawful existing grants is not
interrupted, and personal data obtained in the payment process
remains private and may not be used in any manner for any purpose
other than payment of grants or for any purpose sanctioned by the
Minister of Social Development.
- The new tender must be for a period of five years and a new and
independent Bid Evaluation and Bid Adjudication Committee must be
appointed to evaluate and adjudicate the new tender process. Their
evaluation and adjudication must be made public by filing, with the
Registrar of the Constitutional Court, a status report on the first
Monday of every quarter of the year until completion of the
process.
- If the new tender is not awarded, the declaration of invalidity
of the current contract between SASSA and CPS will be further
suspended until completion of the five-year year period for which
the contract was originally awarded. In this event, SASSA must,
within 14 days of its decision not to award the tender lodge a
report to the Registrar of the Constitutional Court setting out all
the relevant information on whether and when it will be ready to
assume the duty to pay grants itself. Furthermore, CPS must in this
event file with the Constitutional Court an audited statement of
expenses incurred, income received and net profit earned during the
five year completed contract period, which statement must also be
verified by an independent auditor appointed by SASSA and filed
with the Constitutional Court.
- AllPay has been ordered to pay SASSA's and CPS's costs in
relation to the application to lead further evidence brought in the
main merits application.
The Company cannot predict what the timing or outcome of the new
tender process will be, or if a new tender award will be made at
all after the new tender process. The contract between SASSA and
CPS to distribute social welfare grants to ten million South
Africans every month remains in full force and effect until SASSA
has completed the new process and decides to award the new tender,
or for the remainder of the current five year contract if they
decide not to award the new tender.
"We are relieved that the protracted two-year legal battle
regarding the SASSA tender is finally over and that the Court has
provided guidance regarding the way forward," said Dr. Serge
Belamant, Chairman and Chief Executive Officer of Net1. "We remain
committed to provide our ten million social welfare grant
recipients and SASSA with an efficient, world-class payment service
under our current contract with SASSA and we look forward to
participating in any new tender process. Based on our experience
during the last two years, we are convinced that our UEPS/EMV
solution with biometric verification and off-line capability is the
most appropriate product to service the millions of South Africans
who are reliant on this vital service, especially the most
vulnerable citizens in the remote areas of the country," he
concluded.
The Company may issue further comment on the ruling once it has
had sufficient time to study the full judgment.
About Net1 (www.net1.com)
Net1 is a leading provider of alternative payment systems that
leverage its 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.
Net1's UEPS/EMV solution is also completely interoperable with
global EMV standards that seamlessly permit access to all the UEPS
functionality in a traditional EMV environment. In addition to
payments, UEPS can be used for banking, healthcare management,
payroll, remittances, voting and identification.
Net1 operates market-leading payment processors in South Africa,
Republic of Korea, and Ghana. In addition, Net1's proprietary
Mobile Virtual Card technology offers secure mobile payments and
banking services in developed and emerging countries while its
MediKredit and XeoHealth subsidiaries provide its proprietary 5010
and ICD-10 compliant real-time claims adjudication system.
Net1 has 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.
Investor Relations Contact:Net 1 UEPS Technologies Inc.Dhruv
ChopraHead of Investor Relations+1-917-767-6722dchopra@net1.com
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