SOCIAL GRANTS
Court’s panel caught up in row over Net1’s account of profit
The expert panel appointed by the Constitutional Court has inadvertently stepped into the spat between Net1 and Black Sash over the reliability of Net1’s submission to the court detailing the profits made from its contract to distribute social grants. In the report submitted to the court on November 16, the panel referred to a number of additional revenue streams accruing to Net1. This additional revenue was over and above the R1bn operating profit Net1 subsidiary Cash Paymaster Services (CPS) made over the five-year contract. "These profits are net of patent and licence fees paid to CPS’s parent company, Net1, which also exceeded R1bn over the period." While the Court is likely to accept that the patent and licence fees should accrue as profit to Net1, it might want to interrogate three additional revenue streams earned by CPS/Net1 identified by the panel. These are interest earned on grant funds received from National Treasury, sale of financial and insurance products to beneficia...
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