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South African Constitutional Court pronounces remedy for SASSA tender
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”)
South African Constitutional Court pronounces remedy for SASSA tender
Johannesburg – April 17, 2014 - Net 1 UEPS Technologies, Inc. (NasdaqGS: 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:
1. 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.
2. 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.
3. 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.
4. 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.
5. 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:
Dhruv Chopra
Head of Investor Relations
Phone: +1-917-767-6722
Email: dchopra@net1.com
Johannesburg
April 17, 2014
Sponsor:
Deutsche Securities (SA) Proprietary Limited
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