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The President's Lawyer, The Departmental In-Fighting And The Grants: This Is The Mess That's Heading To The Concourt

If you thought the Sassa and CPS social grants debacle couldn't get any worse, just read the weekend newspapers.

12/03/2017 12:45 SAST | Updated 12/03/2017 16:08 SAST
Gallo Images / Sowetan / Sandile Ndlovu
Pensioners collect their grant money on March 01, 2017 in Mpumalanga, South Africa.

The social grants crisis worsened at the weekend, with allegations that President Jacob Zuma's lawyer and the social development minister had both interfered to help Cash Paymaster Services (CPS) keep the contract, of clashes within Social Development and that a CPS shareholder was investigating its conduct.

The South African Social Security Agency (Sassa) grants crisis made the front pages of the City Press, Sunday Times and Sunday Independent again at the weekend.

The debacle over the grants contract is due to be heard in the Constitutional Court on Wednesday March 15, and the Concourt has already told Social Development and its agency Sassa to provide answers by Monday to crucial questions on its contract with CPS. The department appears to be set on keeping CPS as a contractor contrary to the Concourt's ruling of 2014 which ends the existing contract on March 31 and the lack of a competitive bidding process for any new contract.

The Sunday Times reported that Zuma's special advisor, lawyer Michael Hulley, played a key role in making sure that CPS will continue as the social grants contractor and Social Development Minister Bathabile Dlamini rejected any solution that didn't include CPS.

The newspaper said that Hulley was reportedly the person who advised Dlamini to go against the legal opinions she had, including from a senior counsel, to let let the Concourt decide on the CPS contract. The Sunday Times said four sources told it that Hulley had advised Dlamini and Sassa to continue with CPS.

On Sunday, the Presidency said it wasn't aware of the reported meetings.

"The Presidency has noted a report in today's Sunday Times newspaper stating that President Jacob Zuma's legal advisor, Mr Michael Hulley participated in what the paper calls secret meetings with top managers of the South African Social Security Agency (Sassa) on the payment of social grants. The Presidency is not aware of the said meetings," said Dr Bongani Ngqulunga, spokesperson for the Presidency.

The City Press published an interview with the Sassa boss, who told the newspaper that Dlamini had blocked his efforts to report back to the Concourt and directly interfered with attempts to resolve the crisis.

Sassa CEO Thokozani Magwaza, who has been on sick leave, spoke out on the crisis for the first time, telling the newspaper that he'd tried to petition the Concourt since early February for guidance, only to be halted three times by Dlamini. He told City Press that: he was appointed in June but only allowed to take office in November; the research report submitted in October which detailed Sassa's inability to take over the grants from April 2017 was initially withheld from him; that Dlamini thwarted plans for the post office to take over payments; and that he was being victimised for recommending a 12-month contract with CPS instead of the 24 to 36 months preferred by others. "All the threats of suspension are because they say I am not toeing the line," Magwaza told City Press, adding that he had told Sassa staff who contacted him while he was on sick leave: "I implore you not to take illegal decisions."

City Press also reported that some Sassa staff were complaining that they were under pressure to take decisions they didn't agree with and some were refusing to take instructions from people brought in by the minister's aides.

The Sunday Times reported that oth Magwaza and the acting CEO Thamo Mzobe were off ill, apparently due to the stress from the battle with the ministry.

The Sunday Independent reported that investment management company Allan Gray is investigating the business conduct of CPS parent company Net1 UEPS, following allegations that CPS has made problematic microloans to social grant beneficiaries and make unlawful deductions from their grants. Allan Gray has a 16 percent shareholding in Net1 UEPS. These deductions are expected to be raised at Wednesday's Concourt hearing, said the newspaper, saying the CPS micro-lending book stands at R850 million.

"We cannot take what they tell us at face value. If new information comes to light we will take strong action," Allan Gray chief investment officer Andrew Lapping told the Sunday Independent, saying the company was concerned "from a moral and ethical perspective".