South Africa to End Controversial Ties With Net 1 in October

(Bloomberg) -- South Africa will no longer have any welfare beneficiaries paid by Net 1 UEPS Technologies Inc. next month, bringing to an end a controversial relationship that has seen rights activists accuse the company of taking advantage of the nation’s poorest people and a minister accused of perjury by the country’s top court.

Cash Paymaster Services, a unit of Net 1, won’t disburse any social grants in October after tapering down from cash payments to 3.16 million people in April to 221,599 this month, Susan Shabangu, South Africa’s minister of social development, said in an affidavit to the Constitutional Court.

“Consistent with the court order of 23 March, 2018, I wish to report that there are no social-grant beneficiaries who will be paid by CPS for the October 2018 payment cycle,” she said. Those who were paid by the company will instead be paid by the South African Post Office.

The Constitutional Court last year ordered the welfare department, which is overseen by the social development ministry, to comply with an order to find a new distributor for the 150 billion rand ($10.6 billion) a year program that sees one in three South Africans receive payments from the state. CPS’s contract had been declared invalid by the same court in 2014.

On Thursday Bathabile Dlamini, the former social development minister, was ordered by the court to pay a portion of legal costs. The National Prosecuting Authority was told to consider whether it should charge Dlamini with perjury because of her statements during last year’s court case, which was brought by rights activists the Black Sash Trust.

To contact the reporter on this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net, Rene Vollgraaff

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