The Constitutional Court and the High Court in Pretoria have come down hard on former minister of social development Bathabile Dlamini, acting CEO of South African Social Security Agency (Sassa) Pearl Bhengu, and Net1’s Cash Paymaster Services (CPS).
The high court decided CPS has to pay back R316.4 million and has to let auditors have “unfettered access” to its financial information. The ConCourt ruled Bhengu and Dlamini must show why they should not be held personally liable for costs.
High Court Judge Moroa Tsoka yesterday ruled Sassa’s 2012 decision to vary its contract with CPS around the costs of re-registering South Africa’s social grant beneficiaries – and former Sassa CEO Virginia Peterson’s 2014 decision to pay CPS an additional R316.4 million – had been unlawful.
“It is just and equitable the payment, together with interest, be returned to the fiscus for the benefit of those for whom it was intended,” Tsoka said.
Corruption Watch executive director David Lewis said the judgment reinforced the “immense importance” of procurement processes as a bulwark against corruption and maladministration.
“While we are confined to reviewing administrative irregularities, we have long called on the authorities to investigate the relationship between CPS, Sassa and the social development [department],” Lewis said.
However, Net1 CEO Herman Kotze was not taking the pending loss of R316.4 million lying down. “We are disappointed with the court’s judgment and will immediately seek leave to appeal,” said Kotze.
“The additional registrations we performed at Sassa’s request, resulted in the identification and removal of a significant number of ghost beneficiaries and duplicate grants, and had the direct result of saving the South African government more than R2 billion per year for the last five years.”
Kotze said the cost incurred for the additional registrations was recovered “without any profit component”.