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Allan Gray asks Net1 to stop airtime deductions from social grants

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JOHANNESBURG – Investment firm Allan Gray says it has asked Net1 to ensure its subsidiaries stop airtime deductions from social grant beneficiaries for now.

Concerns have been raised about money being siphoned off grants from the neediest people in the country.

President Jacob Zuma was asked in Parliament on Thursday whether he knew about the illegal deductions but he insisted he was not aware.

Allan Grey COO Rob Dower says the company will consider calling a shareholder meeting to remove the Net1 board over its handling of the Sassa payments debacle.

“What was in the article yesterday morning which was extremely concerning, which seem to contradict some sworn affidavits by the CEO of the company. So we’ve been putting pressure on them to answer accusations in that article and to the extent that they’re still making deductions. We’ve asked them in writing to call a holiday on their airtime production and to send three SMSes in someone’s home language to offer people to opt out of their life insurance products.”

Dower said they had contacted Net1 with suggestions to resolve the issue but were awaiting an official response.

An article in the Business Day claims Net1 CEO Serge Belamant could lose his job if the board is recalled.

Dower added that Allan Gray was surprised by media reports that shareholders of Net1 demanded a profit from an extension of Cash Paymaster Services contract with Sassa to handle social grant payouts.

“I saw in the press yesterday that shareholders demanded profit from what looks like a healthy profit from the extension of this deal. This surprised us a lot.

“I don’t know if the other 84% of shareholders asked to make any profit, but we certainly don’t think it will be good for the company to be seen benefiting from this.”

Sassa and the Department of Social Development Bathabile Dlamini have come under fire after failing to find a new service provider as the contract with the current service provider CPS lapses at the end of March.

In 2014, the Court ruled that the contract with CPS was invalid and unconstitutional and could not be renewed.

Minister Dlamini has been criticised over her handling of the Sassa matter with Members of Parliament, among others, calling for action against her and other senior officials.

But during his first question and answer session for the year, President Jacob Zuma dodged a call for a commission of inquiry into the social grants debacle and distanced himself from allegations that his lawyer was involved in talks about the payments contract.

Zuma also deflected questions about whether he planned to take action against Dlamini and said it was “a funny democracy” to punish someone based on suspicion.

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