As we all know, the 17-million recipients of SA’s social grants are now imperilled by frightening incompetence within the social welfare department. Interestingly, the issue is so extensive and wide-ranging it has spilt over into the fund-management industry and an argument is now raging over whether investment houses are acting consistently with their social responsibility mandates by investing in the company that distributes the grants, Net1 UEPS Technologies. One of SA’s largest and most respected fund managers, Allan Gray, is mainly in the firing line here, since, by dint of history, it holds on behalf of its clients about 16% of the company. It has to be said that the accusations against Allan Gray are in some respects unfair. The company is a value investor and, on those grounds alone, it’s hard to fault the investment. Net1 is trading at a very modest 7.5-times its annual earnings. Its revenue has almost doubled over the past five years and its profit margin is extremely heal...
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