The North Gauteng High Court in Pretoria has ordered Cash Paymaster Services (CPS) to pay back R316m, with interest, to the South African Social Security Agency (Sassa).
Sassa paid CPS in 2014 after the company claimed it had enrolled more grant recipients and beneficiaries than it had been contracted to provides services for.
amaBhugane previously reported that Sassa and then-chief executive officer Virginia Petersen, had accepted the CPS claim at face value and paid the money.
This was despite the fact that the CPS contract awarded in 2012 required it to undertake payment and enrolment. Petersen resigned in 2016.
Civil society organisation Corruption Watch petitioned the court in 2015 to have the payment reversed.
'Fiscus has been robbed'
Initially, Sassa and CPS opposed the legal action until Sassa withdrew its objection in 2017.
In a statement, Corruption Watch quoted Judge Moroa Tsoka saying: "As a result of Sassa's unlawful conduct, the fiscus has been robbed of a substantial amount of money intended for the most vulnerable and poor people of our country.
"It is just and equitable that the payment of R316m made by Sassa to CPS, together with interest, be returned to the fiscus for the benefit of those for whom it was intended in the first place."
Corruption Watch welcomed Tsoka's judgment and said it represented a significant win for civil society and demonstrated the importance of pursuing unlawful transactions.
"This judgment reinforces the immense importance of procurement processes as a bulwark against corruption and maladministration," the organisation's executive director David Lewis said.
"We have long called on the criminal justice authorities to investigate the relationship between CPS, Sassa and the social development ministry. We repeat that call, as we do our call for the International Finance Corporation to review its significant shareholding in a company that conducts itself in the manner that CPS does."
- FOLLOW News24 on Twitter