NET 1 UEPS TECHNOLOGIES INC - Net 1 Makes Further Statement Regarding U.S. Government Investigations

Net 1 Makes Further Statement Regarding U.S. Government Investigations

Net 1 UEPS Technologies, Inc.
Registered in the state of Florida, USA
(IRS Employer Identification No. 98-0171860)
Nasdaq share code: UEPS
JSE share code: NT1
ISIN: US64107N2062
(“Net1” or “the Company”)

Net 1 Makes Further Statement Regarding U.S. Government Investigations

On December 4, 2012, Net1 made public disclosure through a filing with the
Securities and Exchange Commission (“SEC”) that it had received letters from the
U.S. Department of Justice, Criminal Division (“DOJ”) and the SEC informing it that
they are conducting investigations concerning the Company. Net1 recognized that the
announcement of these investigations raises questions and concerns about the
Company and its SASSA contract.

As a preliminary matter, the Company believes that it is important to note that these
investigations are investigations and not findings of wrongdoing on the part of any
person and that Net1 is fully cooperating with the investigations.

Net1 wants to assure its stakeholders that it is continuing to provide the South African
government with its payment delivery service to the millions of South Africans who
depend on the Company to deliver their social security grants in a timely and efficient
manner and that the Company has no reason to believe that these investigations will
impact its 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 the
Company 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 Net1
       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 the Company believes 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 the Company’s 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
        Net1.
    •   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.
    •   Net1, 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 Net1’s
        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, the Company does 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.


Investor Relations Contact:
Dhruv Chopra
Vice President of Investor Relations
Phone: +1-212-626-6675
Email: dchopra@net1.com

Johannesburg
5 December 2012

Sponsor:
Deutsche Securities (SA) (Proprietary) Limited

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