Net1 faces shareholder revolt over grants crisis

Net1’s largest single shareholder, investment firm Allan Gray, does not want the company to profit from any new contract with the South African government over grants payments.

Speaking to talk Radio 702 on Friday ahead of the Constitutional Court ruling on the grants crisis, Allan Gray COO Rob Dower said that the firm would be “very happy” if Net1 made no profit from a deal.

The COO was also critical of Cash Paymaster Services CEO, Serge Belamant’s comments made during the court battle, calling them insensitive.

Throughout the proceedings, Belamant came across as arrogant and condescending, telling media that CPS was the only solution to the grants crisis, and deriding the South African Post Office’s proposal that it take over the system.

Belamant also told shareholders that it expects 30% to 40% profit from a new contract with Sassa after 1 April.

Analysts have described CPS’ behaviour as holding a gun to the Constitutional Court’s head, effectively demanding that the Court agree to its terms, threatening that it will not be able to provide its services otherwise.

The group’s lawyer tried to clarift that the company was no being threatening in its statements, simply informing the court that the process to pay grants would take time, and time was running out.

Allan Gray owns 16% of Net1, which is enough for it to call a shareholders’ meeting over the way Net1 has handled the crisis, it said.

According Dower, Allan Gray could push for the removal of the Net1 board over its conduct.

Read: This is how much more money CPS wants for its new 2 year social grants contract

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