Johannesburg - Allan Gray, one of South Africa’s biggest money managers, said it’s “increasingly concerned” over the running of Net1 UEPS Technologies Inc., a company whose lending practices to people on welfare have been criticised as unethical by human rights organisations.
The second-biggest shareholder in Net1, with a 15.6% stake, said its research into the company shows that the business doesn’t always answer its phones when called by clients, who are among South Africa’s poorest and least educated. Net1 has the contract to distribute welfare payments to more than 17 million South Africans and has been accused of illegally using information it gleans to help its subsidiaries sell those people services such as mobile-phone airtime and loans.
“It’s not illegal not to answer your phone but it’s not good business practice,” Andrew Lapping, Allan Gray’s chief investment officer, said in an interview on Thursday. “We’ve been trying to find out exactly how beneficiaries are treated. If you have a problem, how easy is it to get hold of them? How easy is it to cancel debit orders?”