NPA sticks to its decision over deductions by Net1
The National Prosecuting Authority (NPA) had reaffirmed its earlier decision not to prosecute payments group Net1 on criminal charges related to its alleged noncompliance with social grant regulations, the company said on Thursday.
In July 2016, the South African Social Security Agency (Sassa) brought criminal charges against Net1 and Grindrod Bank, claiming they had failed to comply with regulations that prohibited deductions from bank accounts of social grant beneficiaries. But in August 2016, the NPA said it would not prosecute. On Wednesday, the NPA notified Net1 that no further action would be taken and that it could "consider the case closed".
Net1 said the "charges were not justified and could be classified as vexatious in nature".
Net1 said it had "reserved its rights in that regard".
Net1’s subsidiary Cash Paymaster Services (CPS) distributes social grants to millions of beneficiaries. Its contract ends in March 2018.
There have been widespread complaints by beneficiaries about unauthorised deductions for airtime, electricity and funeral policies.
The NPA reaffirmation comes a week after the High Court in Pretoria ruled attempts by Sassa to prohibit deductions from the accounts of social grant recipients were unenforceable. The court’s ruling followed after Net1 sought a declaratory order that the regulations do not restrict social grant recipients in the way they operate their bank accounts.
The regulations, promulgated in May 2016, prohibit certain deductions from Sassa-branded bank accounts of social grant beneficiaries held with Grindrod Bank, into which social grants are paid.
However, Sassa said on Thursday last week that it would appeal against the judgment because of its "unimaginable unintended consequences".
Sassa intends to advertise a new five-year tender in June for a company that will take over from CPS.