Net1 ready to lock horns with Absa
CEO vows to sue losing bidder for R2-billion
DEFIANT Net1 CEO Serge Belamant came out swinging this week after a damning court finding on how Net1 scored a R10-billion tender, vowing to sue the losing bidder Absa for R2-billion.
Last Friday, the Constitutional Court ruled that the SA Social Security Agency (Sassa) had blundered by awarding Net1 the deal to pay grants to 40% of the country — 21.6-million people.
Justice Johan Froneman ruled that the tender should be rerun, sparking an initial 28% plunge in Net1’s share price, which then partly recovered when it emerged Sassa could use a loophole to keep the existing deal in place.
However, Belamant has interpreted the finding that the tender was “invalid” as “solely the fault of Sassa — we’re just the innocent bystander in this”.
Now, Belamant says he will use the ruling to hike Net1’s damages claim against Absa, whose grant arm Allpay lost out on the 2012 tender, to a mammoth R2-billion.
Allpay claimed in court papers that “money changed hands” to swing the deal in Net1’s favour, and questioned why Sassa had changed the tender specifications at the last minute to leave Net1 as the only qualifying bidder.
“The court found we’re not guilty of anything. So the first amount [we claimed from Absa] was R750-million, and now it’s around R2-billion.
“We’re very nice people, but we’re not that nice,” he said.
Absa, however, said Bela- mant’s claims against it had “no merit” — so it hadn’t even set aside a cent as a contingent liability.
The Constitutional Court made several scathing findings against Sassa, saying its conduct was “irregular” and it was “unhelpful and obstructionist” to anyone who asked questions.
Question marks still hover over Net1, partly because it was the beneficiary of Sassa’s bungling, and the fact that Sassa official John Tsalamandris told someone the tender was “just so blatantly dirty” because key people “took money” in cash.
It’s more a question of saying, guys, it’s not on. Tell us how you knew before anyone
Belamant, however, said that not a shred of evidence underpinning this claim had emerged. “You say we’re against the ropes. Well, I’ve seen Muhammad Ali against the ropes, and he has come back and knocked the other guy out,” he said.
Belamant said that if suspicion should fall on anyone it should be on Absa for apparently being “leaked” an advance copy of the judgment before anyone knew.
“A colleague of ours was contacted two weeks ago by a procurement manager at Absa, and was asked to come in with a proposal to see if they could provide biometric-based technology because [Absa] was now in an extreme rush because they believed things could be going in the right direction for them,” he said.
Belamant said Net1’s investigations showed there was a leak in which Absa or its lawyers were told the judgment was coming out, and in which direction the finding would go.
“When we talk about corruption, this sounds a little funny.
“It’s not a question of tit-fortat [against Absa]. It’s more a question of saying, guys, it’s not on. Tell us how you knew about it before anyone else,” he said.
One of the reasons that this could cause the regulators to prick up their ears is that anyone who had advance knowledge of the ruling would have been able to sell Net1’s shares short, knowing that the stock would drop on the ruling and they could make a killing.
But Absa’s Allpay said Belamant’s claims were “defamatory” and “contemptuous of the Constitutional Court”.
“All Pay did not have any advance notice of the outcome of the judgment,” said Allpay’s lawyer Anthony Norton.
“Belamant’s suggestions of corruption are offensive,” Norton said.
Norton said Absa would “take the necessary steps to protect its reputation”.
While Belamant now appears to feel that Net1 is in the clear, there is still an investigation into the tender taking place by the US FBI, as well as a classaction lawsuit from a group of US shareholders over the alleged corruption.
This is not the first time that the tenders Net1 scored from government have sparked claims that it paid kickbacks.
Back in 2004, the since-buried Scorpions crime-fighting unit probed whether Limpopo premier Ngoako Ramatlhodi took kickbacks from Net1 subsidiary CPS in the province, where it had a R250-million contract to provide pension payouts. The probe was shelved in 2008.
Questioned over whether his company had been approached for bribes to secure tenders, Be- lamant responded that this used to happen frequently.
“Normally, it’s the first thing they do. Sometimes it’s in a very clandestine manner, and sometimes they just infer it . . .
“People used to approach us in the late 1990s and early 2000s, it used to be a free-for-all.
“But we took a decision that if we started paying one person, we’d have to pay everyone, and we’re simply not interested in that,” he said.