Johannesburg - Net1 founder Serge Belamant will retire early after a storm of controversy over a contract it holds in South Africa to distribute billions of rands of welfare payments to 17 million people.
Belamant, who founded the company 27 years ago, will quit at the end of the month rather than retiring next year to allow changes at the company and partly due “to the views expressed by certain of the company’s shareholders”, Net1 said in a statement.
Net1’s biggest shareholders are the World’s Bank’s International Finance Corporation and Cape Town’s Allan Gray. Both have been critical of Belamant and the company.
“This will make it easier to move forward with the corporate governance issues that have been highlighted,” Andrew Lapping, chief investment officer of Allan Gray, said by phone. “It’s definitely a step in the right direction.”
Net1 won a contract in 2012 to distribute welfare in South Africa. Two years later the Constitutional Court ruled the contract invalid and instructed the South African Social Security Agency to find a new provider. When it failed to do so by March this year, the court allowed the contract to be extended until 2018 under stringent conditions.
Net1 has been accused by human rights organisations of selling goods and services to South Africa’s poorest and least educated, ranging from loans to mobile phone time without explaining them adequately and by improperly using information gleaned from its grant distribution activity. It has denied the allegations.
Belamant attracted criticism for his conduct and public comments.
In August last year he said in a conference call about a court case over deductions from grants that “between you and me and a bar of soap, I don’t really care what it means. It’s not going to make any difference to how much money we’re going to make.”
He will provide consultant services to Net1 for 2 years.
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