ALLPAY, an Absa subsidiary that lost a bid for a R10bn tender to pay social grants, says it will defend a R478m lawsuit filed by Net1 UEPS Technologies, which won the contract in circumstances a court described as "illegal".
Net1 on Wednesday filed a damages lawsuit in the South Gauteng High Court accusing AllPay of making false reports to media about alleged bribery to secure the tender.
Anthony Norton, a partner at Nortons Incorporated, which is representing AllPay, said on Wednesday that Net1 had made "a number of unfounded claims" against AllPay in its summons, adding: "AllPay is of the view that the claims made by Net1 are both factually and legally flawed and intends opposing the relief sought by Net1."
US authorities, including the Federal Bureau of Investigation and the Securities and Exchange Commission, are investigating Net1 after a complaint from AllPay, which also reported the matter to the Hawks.
In its summons, Net1 accused AllPay of giving the media "false" information, which alleged or implied that the tender process was "tainted by corruption through bribes". The company claimed that AllPay injured its reputation, infringed its goodwill and reduced Net1’s share price.
Net1’s share price rose 14.4% on Wednesday to close at R51.50. The stock lost half its value last week after the company announced that it was being investigated.
Mr Norton said there had been various media investigations related to the awarding of social grant tenders, and the reportage on the R10bn tender was not a new development.
He denied that AllPay orchestrated any media reports.
The investigation into the awarding of the tender "is a decision which has … been taken by the relevant US authorities on the basis of their own independent assessment of the relevant information at their disposal", Mr Norton said.
It was surprising that Net1 would suggest that "co-operating with the relevant regulators could be unlawful or defamatory".
Net1 itself stated in a Stock Exchange News Service announcement that these were "investigations and not findings of wrongdoing on the part of any person", he said.