Net 1 UEPS Technologies Inc. has announced that the South African Constitutional Court ruled 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 (“CPS”) was constitutionally invalid. However, the Constitutional Court suspended its declaration of invalidity pending determination of a just and equitable remedy. The grant of a just and equitable remedy is reserved pending a further hearing, which has been set for February 11, 2014. The parties have been ordered to submit additional information on affidavit by January 30, 2014. Finally, the Constitutional Court ordered the CEO of SASSA, SASSA and the Company to pay costs, including the cost of three counsel, in the High Court, South African Appeals Court and the Constitutional Court to AllPay Consolidated Investment Holdings Limited (“AllPay”).
The Company cannot predict what the outcome of the February 2014 hearing will be. 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 the Constitutional Court determines the appropriate remedy.
The Constitutional Court is the highest court in South Africa and this judgement follows an appeal by AllPay, an unsuccessful bidder, against the unanimous judgement by the South African Appeals Court on March 27, 2013, that the tender process was valid and legal.