Net1 announces that CPS/SASSA increased price not subject to Constitutional Court endorsement
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
("Net1" or "the Company")
Net1 announces that CPS/ SASSA increased price not subject to Constitutional Court
Johannesburg, December 7, 2018 – Net1 today announced that it has received an order from
the Constitutional Court of South Africa ("Constitutional Court") regarding the determination
of fees and payment between the Company’s subsidiary, Cash Paymaster Services ("CPS"),
In its previous order handed down on March 23, 2018, among other things, the Constitutional
2. It is declared that, for the period of six months from 1 April 2018, SASSA and CPS
are under a constitutional obligation to ensure payment of social grants to
beneficiaries who are paid in cash.
4. SASSA and CPS must ensure that for the period of six months from 1 April 2018
payment of social grants is made to beneficiaries who are paid in cash on the same
terms and conditions as those in the current contract between them.
4.1 CPS may in writing request National Treasury during the six month period to
investigate and make a recommendation regarding the price to be paid for the
service it is to render in terms of paragraph 4 of this order.
4.2 National Treasury must file a report with this Court within 21 days of receipt of
the request setting out its recommendation.
SASSA interpreted the above order to imply that the Constitutional Court had to rule
specifically on the matter in order for them to adopt the Treasury recommended rate
(excluding VAT) of ZAR 44.35 for cash payments and ZAR 16.94 for biometric payments
performed by CPS, versus the previously contracted rate of ZAR 14.42.
The Company accordingly filed an urgent application on August 22, 2018 with the
Constitutional Court to obtain the Court’s endorsement of the Treasury recommended rate.
The Constitutional Court has now ordered that it will not consider the urgent application, on
the basis that "it is not in the interest of justice to hear it because nothing prevents the parties
from coming to an agreement on increased payments without court sanction, and if they do
not, normal legal processes in other courts must be filed to determine the effects."
"We welcome the Constitutional Court clarification that its consent is not required to finalize
the pricing for the last six months of the contract between CPS and SASSA,” said Herman
Kotzé, CEO of Net1. “We look forward to engaging directly with SASSA to finalize our
remuneration in accordance with the Treasury recommendation for the six-month period
ending September 30, 2018, and bringing the six-and-a-half-year contract to its conclusion,"
About Net1 (www.net1.com)
Net1 is a leading provider of transaction processing services, financial inclusion products and
services and secure payment technology. Net1 operates market-leading payment processors
in South Africa and the Republic of Korea. Net1 offers debit, credit and prepaid processing
and issuing services for all major payment networks. In South Africa, Net1 provides
innovative low-cost financial inclusion products, including banking, lending and insurance,
and is a leading distributor of mobile subscriber starter packs for Cell C, a South African
mobile network operator. Net1 leverages its strategic equity investments in Finbond and
Bank Frick (both regulated banks), and Cell C to introduce products to new customers and
geographies. Net1 has a primary listing on NASDAQ (NasdaqGS: UEPS) and a secondary
listing on the Johannesburg Stock Exchange (JSE: NT1). Visit www.net1.com for additional
information about Net1.
This press release contains forward-looking statements that involve substantial risks and
uncertainties. All statements, other than statements of historical fact, included in this press
release regarding strategy, future operations, future financial position, future revenues,
projected costs, prospects, plans and objectives of management are forward-looking
statements. The Company may not actually achieve the plans, intentions or expectations
disclosed in its forward-looking statements. Actual results or events could differ materially
from the plans, intentions and expectations disclosed in the forward-looking statements that
the Company makes. Factors that might cause such differences include, but are not limited to:
SASSA’s interpretation of the Constitutional Court’s order; other factors, many of which are
beyond the Company’s control; and other important factors included in the Company’s
reports filed with the Securities and Exchange Commission, particularly in the “Risk Factors”
section of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30,
2018, as such Risk Factors may be updated from time to time in subsequent 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:
Head of Investor Relations
Media Relations Contact:
Bridget von Holdt
Business Director – BCW
December 7, 2018
Rand Merchant Bank, a division of FirstRand Bank Limited
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