Net1 under FBI investigation for corruption in SA
Net1 UEPS Technologies, a provider of alternative payment systems, says it has received letters from the US Department of Justice (DOJ) Criminal Division and the SEC regarding an investigation into possible acts of corruption in South Africa.
Net1, through its subsidiary CashPaymaster Services, manages and distributes social grants in South Africa having been awarded a R10 million contract by the SA Social Security Agency (Sassa).
In October, the North Gauteng High Court ruled that the tender process was improper. However, it added that the contract would remain valid and would not be set aside.
The group has a primary listing on the Nasdaq and a secondary listing on the JSE.
Net1 said in a statement on (4 November) that it had received a letter informing the group that the DOJ and the Federal Bureau of Investigation had begun an investigation into whether Net 1 UEPS Technologies, and its subsidiaries violated provisions of the Foreign Corrupt Practices Act and other US federal criminal laws by engaging in a scheme to make corrupt payments to officials of the Government of South Africa in connection with the Sassa contract.
The letter stated that an investigation would also be conducted into whether Net1 engaged in violations of the federal securities laws in connection with statements made by the group in its SEC filings regarding this contract.
On the same date, Net1 said it received a letter from the Division of Enforcement of the Securities and Exchange Commission advising it that it is also conducting an investigation concerning the company. “The SEC letter states that the investigation is a non-public, fact-finding inquiry,” the group said.
Net1 noted that it intends to cooperate fully with the DOJ and the SEC regarding these
investigations.
“Net1 is unable to predict what action, if any, might be taken in the future by either the DOJ or the SEC as a result of the matters that are the subject of these investigations or what impact, if any, this announcement and the existence of these investigations may have on Net1’s relations with Sassa; the Net 1 BEE option transaction; the company’s financial position; results of operations and cash flows; its intended business strategies; or Net1’s share price,” the group said.
Related articles
Court grants leave to appeal in Sassa case
Net1 reaches biometric cards milestone
Net 1 sees 18% decrease in earnings for Q3
Loading ...