Net 1 Makes Further Statement Regarding U.S. Government
JOHANNESBURG, SOUTH AFRICA -- (Marketwire) -- 12/05/12 -- Net 1 UEPS
Technologies Inc. (NASDAQ:UEPS)(JSE:NT1). On December 4, 2012, we
made public disclosure through a filing with the Securities and
Exchange Commission ("SEC") that we have received letters from the
U.S. Department of Justice, Criminal Division ("DOJ") and the SEC
informing us that they are conducting investigations concerning our
company. We recognize that the announcement of these investigations
raises questions and concerns about our company and our SASSA
As a preliminary matter, we believe that it is important to note that
these investigations are investigations and not findings of
wrongdoing on the part of any person and that we are fully
cooperating with the investigations.
We want to assure our stakeholders that we are continuing to provide
the South African government with our payment delivery service to the
millions of South Africans who depend on us to deliver their social
security grants in a timely and efficient manner and that we have no
reason to believe that these investigations will impact our ability
to continue to do so.
These investigations appear to be directed at matters which are
similar to those that were the subject of articles which appeared in
various South African newspapers after AllPay Consolidated Investment
Holdings (Pty) Limited ("AllPay") instituted legal proceeding in the
South African courts to set aside the contract awarded to us in
January 2012 by SASSA. AllPay was an unsuccessful bidder for the
SASSA contract. The litigation and allegations are summarized below.
-- AllPay launched an application out of the North Gauteng High Court,
Pretoria on February 8, 2012. The application consisted of two parts,
parts A and B. Part A was an urgent application for an order
interdicting SASSA and us from taking any steps to implement the tender
award, pending the outcome of part B, which was an application for an
order reviewing and setting aside the award of the tender and service
level agreement entered into pursuant thereto.
-- Part A was scheduled for a hearing on February 21, 2012. On the hearing
date, AllPay abandoned part A of the application and approached the
Deputy Judge President for a preferred hearing in respect of part B.
-- The hearing of part B was originally scheduled for April 11 to 13, 2012
but was rescheduled to May 29 to 31, 2012.
-- Subsequent to AllPay having launched its court application, articles
appeared in South African newspapers, most prominently The Mail and
Guardian and The Sunday Independent, containing allegations of
corruption in relation to the tender award. AllPay, whom we believe was
responsible for instigating these allegations, was unsuccessful when it
attempted to introduce the articles' allegations into the court record.
-- In late August 2012, the court declined to set aside our contract but
ruled that the process followed by SASSA was illegal and invalid. The
court also awarded costs of various aspects of the case against AllPay,
SASSA and us.
-- After the High Court ruling, AllPay sought to have the Constitutional
Court of South Africa hear an urgent appeal of the High Court's
judgment, which was rejected by the Constitutional Court on the basis
that it was not in the interest of justice to hear the matter at this
-- We, SASSA and AllPay have appealed the High Court's ruling to the South
African Supreme Court of Appeal. This appeal is expected to be heard
during the first court term of 2013, although no date has been set yet.
-- In September 2012, AllPay complained to the JSE Limited ("JSE") that our
disclosures concerning these matters were inadequate or inaccurate. The
JSE rejected AllPay's claim and its subsequent request that the ruling
As is customary, we do not intend to comment further until the
investigations have been concluded.
About Net1 (www.net1.com)
We are a leading provider of alternative payment systems that
leverage our Universal Electronic Payment System, or UEPS, to
facilitate biometrically secure real-time electronic transaction
processing to unbanked and under-banked populations of developing
economies around the world in an online or offline environment. In
addition to payments, UEPS can be used for banking, healthcare
management, payroll, remittances, voting and identification.
We operate market-leading payment processors in South Africa,
Republic of Korea, Ghana and Iraq. In addition, our proprietary
Mobile Virtual Card technology offers secure mobile payments and
banking services in developed and emerging countries.
We have a primary listing on the Nasdaq and a secondary listing on
the JSE Limited.
This announcement contains forward-looking statements that involve
known and unknown risks and uncertainties. A discussion of various
factors that cause our actual results, levels of activity,
performance or achievements to differ materially from those expressed
in such forward-looking statements are included in our filings with
the Securities and Exchange Commission. We undertake no obligation to
revise any of these statements to reflect future events.
Net 1 UEPS Technologies Inc.
Vice President of Investor Relations
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