South Africa’s Net1 Mobile Solutions is upbeat about its future operations despite a damning constitutional court ruling against its parent company over an 'unlawful' social grants tender.

Cash Paymaster Services (CPS), a division of Net1 UEPS Technologies, stands accused of bribing government officials to win a R10 billion tender to distribute social grants nationally to 15 million recipients over a five year period.

Since the tender was signed in January 2012, Net1, which is listed on both the Nasdaq and the Johannesburg Stock Exchange (JSE), has been on the receiving end of court action in South Africa and even probes by SA special investigating unit the ‘Hawks’ and the US Department of Justice and the Securities Exchange Commission.

A losing bidder of the social grants tender AllPay, a unit of South African bank Absa, launched court actions against Net1 in South Africa’s North Gauteng High Court and the Supreme Court of Appeal before turning to the highest court in the land, the Constitutional Court, to have the multibillion social grants tender scrapped.

And on Thursday, the Constitutional Court’s Justice Johan Froneman slammed the South African Social Security Agency (Sassa) for its “irregular” conduct regarding the Net1 deal. The court then ruled that Sassa needs to re-issue the tender within the next 30 days, while ensuring no legitimate current social grants are lost, payments are not interrupted, and personal data remains private.

The ruling is a big setback for Net1, which has since seen its share price plunge in trade on the JSE as its stock has plummeted over 25%. On the Nasdaq, Net1’s share price has fallen over 10% since the ruling. Its share price on the JSE; though, has clawed back over 6% on Tuesday.

But subsidiary of the Net1 Group, Net1 Mobile Solutions - which says it is not part of the Sassa deal - is positive about its future prospects, despite the social grants tender debacle its parent company faces.

“Net1 Mobile Solutions is a business unit of Net 1 UEPS Technologies, Inc., nevertheless, Net1 Mobile Solutions is a stand-alone business and the court ruling will not affect us directly,” Philip Belamant (pictured), managing director of Net1 Mobile Solutions, has told ITWeb Africa in an emailed statement.

“The findings of the court will have no direct effect on Net1 Mobile Solutions, its management team, employees, suppliers, partners or our clients, and will have no bearing on our day to day business activities. It is business as usual.

“Furthermore, we remain excited about the work we are doing and have diversified our business, as has Net1 Group, so as to not have all our eggs in one basket,” Belamant said.

Belamant has told ITWeb Africa that Net1 Mobile Solutions has proven to be an up-and-coming performer for Net1 UEPS Technologies as it has grown to become the group’s “third biggest” revenue generator in the last year. Belamant; though, couldn’t disclose his subsidiary’s latest financial results.

Services that Net1 Mobile Solutions offer include the likes of Mobile Virtual Card (MVC) technology, prepaid vending, mobile network operator (MNO) solutions, third party payments, ‘chip and SIM’ cards, cryptography, custom development and banking.

Net1 Mobile Solutions operates across the globe in markets such as the US and India.

But the business is also active in African markets such as Ivory Coast and Cameroon where it offers prepaid vending solutions and in Malawi where its advanced airtime MNO solution is being carried out, according to Belamant.

Other African markets that Net1 Mobile Solutions lists as its active territories on its website include Botswana, Ghana, Mozambique, Nigeria, Namibia, Rwanda, South Africa and Zimbabwe.

But despite Net1 Mobile Solutions being upbeat about its future, a dark cloud hangs over its parent company as future criminal proceedings against it could be in the offing.

This week, non-governmental organisation Corruption Watch has requested the South African Police Service (SAPS) to investigate Net1 UEPS Technologies over the social grants scandal.

Meanwhile, Sassa chief executive officer Virginia Petersen told Radio 702 on Wednesday that there is no clear evidence to prove that there was fraud and corruption in the awarding of the contract.

“I can’t work on perception; I have to work on fact. If there is evidence, it will be investigated. All of government’s agencies have looked into this matter and no one has come and said there is clear evidence of fraud and corruption,” Petersen told the radio station.