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NET 1 UEPS TECHNOLOGIES INC - Net1 Announces Closure of FCPA Investigation by U.S. Department of Justice

Release Date: 27/07/2017 14:45
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Net1 Announces Closure of FCPA Investigation by U.S. Department of Justice

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”)

Net1 Announces Closure of FCPA Investigation by U.S. Department of Justice

Johannesburg, July 27, 2017 – Net1 (NasdaqGS: UEPS; JSE: NT1) today announced
that its legal counsel has received a letter from the Department of Justice, Criminal
Division, Fraud Section (“DOJ”), advising the Company that the DOJ has closed its
investigation concerning possible violations of the Foreign Corrupt Practices Act
(“FCPA”). The letter received from the DOJ is available on the Company’s website at
http://ir.net1.com/phoenix.zhtml?c=73876&p=irol-downloads.

The DOJ investigation commenced in November 2012, following the award of the
SASSA national contract to the Company in January 2012. The investigation was
initiated largely as a result of one of the losing bidders for the contract, Barclays
Africa’s subsidiary AllPay Consolidated Investment Holdings (Pty) Ltd (“AllPay”),
referring unsubstantiated South African press articles to the DOJ, alleging or implying
that the SASSA tender process was tainted by corruption involving the Company’s
subsidiary, Cash Paymaster Services Proprietary Limited. These actions resulted in
the DOJ and United States Securities and Exchange Commission (“SEC”) announcing
investigations into alleged FCPA and disclosures violations on November 30, 2012.

On June 8, 2015, the Company received a letter from the SEC stating that it had
concluded its investigation and that it did not intend to recommend an enforcement
action against the Company. The receipt of the letter from the DOJ yesterday
therefore concludes the United States government’s investigation into this matter
which commenced in 2012.

On February 14, 2013, the Company filed an application pursuant to Section 34 of the
South African Prevention of Corrupt Activities Act in South Africa with the South
African Police Service to investigate the allegations of corruption that were contained
in certain newspaper reports. Section 34 deals with the reporting of suspected fraud,
theft, extortion and forgery. In November, 2015, the Company received a written
notice from the South African Police Service’s Directorate for Priority Crime
Investigation (“the Hawks”), stating this case was investigated and the prosecutors
assigned to the case declined to prosecute these matters. The Hawks closed the
investigations in November 2015.

As a result of the U.S. government investigations initiated in 2012, on December 24,
2013, the Company, its chief executive officer and its chief financial officer were
named as defendants in a purported class action lawsuit filed in the United States
District Court for the Southern District of New York alleging violations of the federal
securities laws. The lawsuit was brought on behalf of a purported shareholder of Net1
and all other similarly situated shareholders who purchased our securities between
August 27, 2009 and November 27, 2013. The U.S. District Court dismissed this class
action litigation in September 2015.

“We co-operated with all government agencies and other regulatory bodies regarding
these allegations as well as the extensive investigations that followed over the last
four and half years,” said Mr. Herman G. Kotzé, chief executive officer of Net1. “The
closure of the DOJ investigation concludes a lengthy, arduous and costly exercise
involving government agencies in the United States and South Africa, including the
DOJ, SEC and the Hawks. This letter from the DOJ is the final step to clear our name,
and is consistent with the total absence of any findings of irregularities against us by
any United States or South African court or regulator, the SEC or the Hawks. We will
continue to focus our energies and resources on the expansion of our businesses in
South Africa and internationally,” he concluded.

About Net1 (www.net1.com)

Net1 is a leading provider of alternative payment systems that leverage its Universal
Electronic Payment System (“UEPS”) or utilize its proprietary mobile technologies.
The Company operates market-leading payment processors in South Africa and the
Republic of Korea. Through Transact24, Net1 offers debit, credit and prepaid
processing and issuing services for Visa, MasterCard, ChinaUnionPay, Alipay and
WeChat in China and other territories across Asia-Pacific, Europe and Africa, and the
United States. Through Masterpayment, Net1 provides payment processing and
enables working capital financing in Europe.

UEPS permits the Company 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 interoperable with global EMV standards that seamlessly enable 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’s mobile technologies include its proprietary mobile payments solution - MVC,
which offers secure mobile-based payments, as well as mobile banking and prepaid
value-added services in developed and emerging countries.

Net1 has a primary listing on the NASDAQ and a secondary listing on the
Johannesburg Stock Exchange.

Forward-Looking Statements

This press release contains forward-looking statements. All statements, other than
statements of historical fact, including the Company's expectations about allegations
made against the Company, are forward-looking statements, and future events may
differ from such expectations. Please refer to the "Risk Factors" section of our Annual
Report on Form 10-K for the fiscal year ended June 30, 2016, as they may be updated
from time to time in future reports. The Company does not assume any obligation to
update any forward-looking statements, whether as a result of new information, future
events or otherwise.
Investor Relations Contact:
Dhruv Chopra
Head of Investor Relations
Phone: +1-917-767-6722
Email: dchopra@net1.com

Media Relations Contact:
Bridget von Holdt
Business Director – Burson-Marsteller South Africa
Phone: +27-82-610-0650
Email: bridget.vonholdt@bm-africa.com

Johannesburg
July 27, 2017

Sponsor:
Rand Merchant Bank, a division of FirstRand Bank Limited

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