BRONWYN NORTJE: Net1’s role in grants fiasco puts spotlight on social responsibility
Fund managers ignore the ethics of investment at their peril — as Allan Gray has found out
You can bet your cotton socks SA’s fund managers took a closer look at their portfolios after Allan Gray was singled out for its holdings in Net1 UEPS Technologies. As the controversial parent company of social grants distributor Cash Paymaster Services (CPS), Net1 has been at the centre of the scandal after being accused of using its position to cross-sell microloans, insurance and other services to recipients of social grants. Although it is still unclear whether Net1 has done anything illegal, critics argue that most grant recipients have insufficient financial literacy to know that payment for these services would be deducted directly from their grant payments. In short, Net1 appears to have profited from exploitative practices. The unsurprising result of this disclosure was that Allan Gray found itself at the receiving end of a significant public backlash for its not insubstantial stake in the company.Allan Gray argued that it did not buy the shares to profit from the grants cr...
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