Net1 reshuffles board with veteran Jabu Mabuza at the helm
As the company puts subsidiary CPS into business rescue, its CEO says Mabuza is ‘no magic wand’ as it tries to clean up its image
Net1 UEPS, which was recently rocked by a social grants distribution scandal, dismissed vague talk that it picked Jabu Mabuza, one of SA’s best known business leaders, as chair to help clean up its public image.
“The reason we think Jabu is a prime candidate is not because we believe he has some magic wand he can wave to resolve any remaining issues we have,” CEO Herman Kotzé told Business Day in an interview.
Net1, a payment solutions company with extensive operations in emerging markets, named Mabuza — former chair at of Eskom and Telkom — in a board shake-up that also named Antony Ball, a co-founder and chair of activist investor Value Capital Partners as a board member.
Value Capital is also a shareholder in the company with a nearly 13% stake.
The board reshuffle comes as Net1 prepares to put its subsidiary Cash Paymaster Services (CPS), which has been ordered to repay hundreds of millions of rand to the social development department, into business rescue, a form of bankruptcy protection that allows a company to delay creditors’ claims against it or its assets while turnaround specialists work out if it can survive.
The company is also facing a legal challenge from human rights organisation Freedom Under Law, which alleges that it understated profits it earned from the contract to distribute welfare grants by at least R800m.
CPS, which, for about five years, distributed R150bn in social grants annually on behalf of the SA Social Security Agency (Sassa), has liabilities that exceed its assets, Net1 said in its application to the high court to put CPS into business rescue.
“Our last remaining issues with Sassa specifically, those are now all legal matters and the subject of specific court processes,” Kotzé said. “So I don’t think anyone can have much influence over the legal and judiciary system in the country. Those matters will follow the natural course.”
Net1 also appointed Ali Mazanderani to the board, who currently serves on the boards of StoneCo in Brazil, Network International in Dubai, and FiveStars Loyalty in the US.