The current crisis at South African Social Security Agency (Sassa) has led to serious scrutiny into its relations with Cash Paymaster Services (CPS), a company that runs grant payments systems.
The Constitutional Court declared the tender that was awarded to Net1’s Cash Paymaster Services invalid and unconstitutional amid irregularities in the awarding of the deal.
One of South Africa's largest asset managers, Allan Gray, finds itself in the middle of the squabble between Sassa and CPS as it holds almost 16% of the issued share capital of Net1 on behalf of its clients.
Prof Pierre de Vos, Claude Leon Foundation Chair in Constitutional Governance at the University of Cape Town, says based on the court ruling, there are concerns in the way CPS conducts business and the ethics of the company.
Many have been asking why does a reputable company like Allan Grey invested in Net1.
Rob Dower, Chief Operating Officer of Allan Gray says they did not invest with Net1 based on the Sassa contract but it was its exciting technology that drew them to it in 2012.
I agree with Prof de Vos there are serious questions about the ethics of the company.... no matter how exciting the technology is we have to do this with our eyes open.— Rob Dower, Chief Operating Officer of Allan Gray
Remember we only have 16% of the company, we can't control things...— Rob Dower, Chief Operating Officer of Allan Gray
Dower says communication with management is ongoing based on what they hear in the media.
We keep our eyes and ears open to what is going on out there...— Rob Dower, Chief Operating Officer of Allan Gray
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This article first appeared on 702 : We didn't invest in Net1 because of its contract with Sassa - Allan Gray