Net1 has two months to comply with Nasdaq listing rules

Net1 UEPS Technologies said on Thursday the Nasdaq exchange has given it two months to comply with its listing requirements after it failed to file its full-year financial report for 2019.

The JSE-listed group said it received a “delinquency notification letter” from Nasdaq on Tuesday. However, it said the notice has no immediate effect on the listing or trading of the company’s stock.

The Nasdaq said Net1 must submit the plan by December 2. If accepted, the company may be given another three months to regain its compliance status.

Net1 delayed submitting its company filings in the US after the Supreme Court of Appeal ordered it to pay back R317m to the SA Social Security Agency (Sassa). The group said it wanted to assess the full effect of the court ruling, but says it plans to meet the December deadline.

Net1, which provides technology payment systems, among other things, had gone to court to appeal against a 2018 judgment setting aside an agreement between its subsidiary, Cash Paymaster Services (CPS), and Sassa to biometrically reregister about 11-million grant recipients. The company lost that appeal on Monday.

Net1 says it incurred additional implementation costs during the beneficiary bulk reregistration in 2012 and 2013, after Sassa expanded the mandate of its project.

Sassa had agreed to pay CPS R277m, as well as full settlement of the additional costs the company incurred.

Net1 has fought lengthy court battles over the grants system, with CPS ultimately losing its R1.3bn lawsuit against Sassa in July. The claims were based on the alleged deprivation of an opportunity for CPS to earn full service fees for the period April 2006 to June 2010.