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SASSA speaks out on claim

By Mpho Sibanyoni Business Reporter | Dec 11, 2012 | COMMENTS [ 3 ]

THE South African Social Security Agency has broken its silence on corruption allegations against the agency in awarding a R10-billion contract to a US company.

It emerged last week that the US Department of Justice, the Federal Bureau of Investigations and the Securities Exchange Commission were investigating allegations that Net1 paid Sassa officials bribes to secure the lucrative contract.

Details on the investigation emerged soon after Sowetan published a report a week ago raising questions on whether it was ethical for Absa's social subsidiary AllPay to charge poor grant recipients banking fees.

The fees were charged despite the state having had already paid AllPay up to R30 per person to use the company's infrastructure to pay out social grants to beneficiaries.

Sassa awarded Net1 the R10-billion contract to manage and distribute social grants nationally in January.

AllPay and 13 other Absa subsidiaries have taken Sassa to court in an attempt to win back the contract.

Sassa chief executive Virginia Petersen said that AllPay had never complained directly to Sassa about the awarding of the contract.

"No formal complaint has been made to me or any other senior officer of Sassa concerning any irregularity of the nature apparently canvassed with the American authorities," she said.

"AllPay participated in the tender process without objection or complaint. It was only when it turned out to have been unsuccessful that it cried foul."

Peterson said the other reason she could not comment further was because the matter was now part of a court case.

"On August 28, the North Gauteng High Court in Pretoria did not set aside but upheld the granting of the award to CPS (Net1) for the payment of social grants.

"This is the subject matter of an appeal in the Supreme Court of Appeal on February 15.

"Subsequent to August 28, AllPay also sought direct access to the Constitutional Court to review the award granted to CPS as a matter of urgency, but this was refused by the Constitutional Court," she said.

She said she saw in a newspaper report that AllPay was advised by its US attorneys to report the matter to the department of justice.

"However, AllPay and its attorneys have not pertinently raised with me the complaint it has pursued abroad," she said.

She said if there was evidence linking any Sassa employee to fraud or corruption in the payment tender process, she would act on it.

"I will take the necessary disciplinary measures and report such conduct to the appropriate authorities," said Peterson.

Absa declined to comment.

- sibanyonim@sowetan.co.za

COMMENTS [ 3 ]

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This tender was only upheld because the court felt it would be very disruptive to social grant beneficiaries if it was cancelled!! The court found the tender process was fraudulent and corrupt. Dont treat people like fools!!!

Dec 11, 2012 10:15 | 0 replies

Shame, even the poor grant recipients are being 'double taxed'. Why does ABSA feel like the devil of South Africa banks?

Dec 11, 2012 11:28 | 0 replies

Why do we need to outsource services, even basic services, for billions? Who advises our rulers? All this stuff leaves a queasy feeling in the tummy.

Dec 11, 2012 3:56 | 0 replies