NEWS

Allan Gray Researches Net 1 And Confirms Fears About Social Grants

The fund manager has research into social grant provider, CPS, and the outcomes have confirmed the fears of NGOs.

20/04/2017 08:12 SAST | Updated 20/04/2017 11:19 SAST
Gianluigi Guercia/AFP/Getty Images
A member of the South African Human rights Non Governmental Organisation Black Sash holds a placard outside the South African Constitutional Court during an hearing brought forward by various organisations on the possible failure of the South African government in meeting the deadline for Social Grants payment on March 15, 2017 in Johannesburg.

Allan Gray, a company which holds 16 percent of Net1 UEPS Technologies, has conducted research which it says confirmed the fears of NGOs about how the social grants contract was being handled. According to Business Day on Thursday, Allan Gray said it wanted to "pursue other options" before deciding to sell its shares in Net1.

Net1 is the parent company of Cash Paymaster Services (CPS), the company which controversially continues to administer the payment of social grants.

Chief investment officer at Allan Gray, Andrew Lapping, said the company had investigated Net1 and CPS and the concerns of NGOs had turned out to be real.

"Clearly with Net1 we didn't know what we should have known," he told the paper.

Lapping reportedly said Allan Gray would present the information it had to the Net1 board in the hopes that it would implement changes.

NGO Equal Education met senior executives from Allan Gray last week, Business Day reported, including Lapping to discuss deductions from social grant recipients.

"For some time, Equal Education members have been reporting the impact that grant deductions have on their families. Additionally Equal Education staff members hold personal retirement annuities that are managed by Allan Gray," the NGO said.

Equal Education's chief financial officer Yoni Bass told Business Day that the NGO was encouraged by Allan Gray's response.

"They set up the meeting and came to see us. We had a useful interaction and we're hopeful they're going to stick to what they've undertaken."