Net1 UEPS Technologies, a provider of alternative payment systems, says it has\u00a0received letters from the US Department of Justice (DOJ) Criminal Division and the SEC regarding an investigation into possible acts of corruption in South Africa.<\/p>\n
Net1, through its subsidiary\u00a0CashPaymaster Services, manages and distributes social grants in South Africa having been awarded a R10 million contract by the\u00a0SA Social Security Agency (Sassa).<\/p>\n
In October,\u00a0the North Gauteng High Court ruled that the tender process was improper. However, it added that the contract would\u00a0remain valid and would not be set aside.<\/p>\n
The group has a\u00a0primary listing on the Nasdaq and a secondary listing on the JSE.<\/p>\n
Net1 said in a statement on (4 November) that it had\u00a0received a letter informing the group that the DOJ and the Federal Bureau of\u00a0Investigation had begun an investigation into whether Net 1 UEPS Technologies,\u00a0and its subsidiaries\u00a0violated provisions of the Foreign Corrupt Practices Act and other US federal\u00a0criminal laws by engaging in a scheme to make corrupt payments to officials of the\u00a0Government of South Africa in connection with the Sassa contract.<\/p>\n
The letter \u00a0stated that an investigation would also be conducted into whether Net1\u00a0engaged in violations of the federal securities laws in connection with statements\u00a0made by the group in its SEC filings regarding this contract.<\/p>\n
On the same date, Net1 said it\u00a0received a letter from the Division of Enforcement of the Securities and Exchange\u00a0Commission advising it that it is also conducting an investigation\u00a0concerning the company. “The SEC letter states that the investigation is a non-public,\u00a0fact-finding inquiry,” the group said.<\/p>\n
Net1 noted that it intends to cooperate fully with the DOJ and the SEC regarding these
\ninvestigations.<\/p>\n
“Net1 is unable to predict what action, if any, might be taken in the\u00a0future by either the DOJ or the SEC as a result of the matters that are the subject of\u00a0these investigations or what impact, if any, this announcement and the existence of\u00a0these 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\u00a0intended business strategies; or Net1’s share price,” the group said.<\/p>\n
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