JOHANNESBURG, April 17 South Africa's highest
court has ordered the government to open a new tender for the
distribution of social welfare grants, four months after
nullifying a 10 billion rand ($947 million) contract won by Net
1 UEPS Technologies.
Net1 said in statement on Thursday the Constitutional Court
had allowed it to continue providing grants to millions of
pensioners on behalf of the state until a new five-year tender
has been issued.
The South African Social Security Agency (SASSA) would have
to come up with a new tender within 30 days, Net 1 said.
The ruling follows a legal battle between NET 1 and
Barclay's Africa unit AllPay, which lost out on the
initial welfare payments contract and launched a lawsuit against
SASSA and its rival.
AllPay alleged irregularities in the bidding process that
led to NET 1 being investigated by the U.S. Department of
Justice and the FBI into whether it made "corrupt payments" to
South African government officials to win the contract.
The court invalidated the contract in November, saying SASSA
had failed to give due regard to post-apartheid affirmative
action policies known in South Africa as "black economic
Shares in Net1, which also trade in New York, plunged 11.2
percent to 87 rand, albeit on low volumes.
($1 = 10.5643 South African Rand)
(Reporting By Nomatter Ndebele; Editing by Ed Cropley)