Allan Gray has appointed Eighty20 and Summit Financial Partners to investigate debit orders processed by EasyPay, a payments platform owned by Net1 UEPS Technologies, which benefited from the group’s controversial social-grants contract.
Summit would interview EasyPay Everywhere bank-account holders to find out whether they could dispute debit orders as easily as Net1 claimed they could, Leonard Krüger, portfolio manager at Allan Gray, said on Wednesday.
Eighty20 would analyse the actual debit orders, Krüger said.
Allan Gray holds a 15.6% stake in Net1 and recently spoke out against its practices. This followed intense media scrutiny — of Net1 and Allan Gray after the Constitutional Court found the tender awarded to Net1’s Cash Paymaster Services was invalid.
Net1 has sold microloans, insurance and airtime to social grant beneficiaries via EasyPay.
It has faced legal action over allegedly unlawful deductions from Grindrod-branded South African Social Security Agency bank accounts for the products.
Net1 has vociferously denied any wrongdoing, but the company’s founder and CEO, Serge Belamant, stepped down at the end of May.
Last week, Allan Gray’s chief investment officer, Andrew Lapping, condemned Belamant’s $8m golden handshake as "extravagant" and "unjustified".
Allan Gray would present research from Summit and Eighty20 to the Net1 board, where oversight had been strengthened after the appointment of independent directors, said Krüger.
The asset manager, a signatory of the UN’s Principles for Responsible Investment, had augmented the environmental, social and governance research it did on entities it invested in.
It had also introduced the concept of a "veto" by the company’s chief investment officer, Krüger said. The chief investment officer, Lapping, would have the final say on all investment decisions from an ethical point of view.
Lapping has previously said Net1 was a controversial stock, which prompted vigorous debate in its investment team.
Krüger said the company, which had operations in Botswana, Namibia and South Korea, was still an attractive business. He hoped the research findings would remove some of the clouds hovering over the group, he said.