Net1 gets subjected to the ugly face of capitalism

By Alec Hogg

A good friend who earns her crust consulting to big companies reckons people are fundamentally good.  And says there is nothing inherently wrong with corporations. But together – it’s toxic. Net1’s founder and CEO Serge Balamant would surely subscribe to that view.

Winning the SA State’s tender to pay monthly grants to 10m social welfare recipients ushered in a legal nightmare for Net1. As its shares are listed in the US, the loser’s accusations of bribery and corruption triggered investigations by the SEC, the FBI and, in South Africa, the Hawks.

Some years and $15m in legal fees later, both the SEC and the Hawks have closed their investigation without finding any wrongdoing. But some of the mud has stuck, with Net1 shares rated a quarter the level of similar tech stocks. Belamant refused to submit a bid in the subsequent tender. Neither did his accuser. Talk about the ugly face of capitalism.

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