UEPS » Topics » Item 1. Legal Proceedings

This excerpt taken from the UEPS 10-Q filed May 7, 2009.

Item 1. Legal Proceedings

     On February 10, 2009, we instituted a legal proceeding in the form of a review application in the High Court of South Africa (Transvaal Provincial Division) against the Chief Executive Officer of SASSA, in his capacity as such. Various other parties were also cited as respondents, by virtue of them being interested parties. These parties have a right to defend the application, but elected not to do so. In the proceeding, we are seeking to have the Court review and set aside the October 31, 2008 decision of the Chief Executive Officer to make no tender award and terminate the procurement process in respect of SASSA Tender 19/06/BS. The Chief Executive Officer has not yet responded to our review application, except to enter a notice of intention to defend. We cannot predict the outcome of this legal proceeding.

These excerpts taken from the UEPS 10-K filed Aug 28, 2008.

ITEM 3. LEGAL PROCEEDINGS

     There are no material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or of which any of our property is the subject.

ITEM 3. LEGAL PROCEEDINGS


     There are no material pending
legal proceedings, other than ordinary routine litigation incidental to our
business, to which we are a party or of which any of our property is the
subject.


This excerpt taken from the UEPS 10-K filed Aug 29, 2007.

ITEM 3. LEGAL PROCEEDINGS

          There are no material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or of which any of our property is the subject.

This excerpt taken from the UEPS 10-K filed Aug 29, 2006.

ITEM 3. LEGAL PROCEEDINGS

          On July 20, 2005, the South African High Court set aside the service level agreement between Cash Paymaster Services (Northern) (Proprietary) Limited, or CPS N, and the Department of Health and Welfare of the Province, or the Department. The court’s ruling followed an application by Empilweni Payout Services (LP) (Pty) Limited, or Empilweni, a disqualified bidder for the current contract, asking the court, among other things, to set aside the action of the Limpopo Province Tender Board, or the Tender Board, that awarded the contract to CPS N. Empilweni’s application alleged that the Tender Board acted improperly in awarding the tender to CPS N. Empilweni did not seek relief against CPS N or allege wrongdoing by CPS N. Empilweni’s application was opposed by the Tender Board, the Department, the Premier of the Province and CPS N.

          The court’s ruling was suspended as a result of filing leave to appeal on July 25, 2005 by the Province, the Premier of the Province and the Tender Board. As a result, the contract was reinstated pending the outcome of the appeal. The court directed the Tender Board, the Department and CPS N each to pay a portion of Empilweni’s costs of the action, which were not be material to us. This order was suspended pending the outcome of the appeal.

          Although the court set aside the contract, the court did not grant Empilweni’s request to direct the Tender Board to readvertise the tender or to readjudicate the tender, and in effect left it to the discretion of the Tender Board as to whether it wishes to invite new tenders. The Province has emergency powers to award a contract without commencing a formal tender process. In April 2006, we signed a new contract with the Limpopo provincial government for the distribution of social welfare grants until December 31, 2006. The terms and conditions of the new contract are substantially the same as the contract awarded in November 2002 and executed in March 2003.

          There have been reports in the South African press, first reported in 2004 and more recently in articles relating to the setting aside of the Limpopo contract, that the Directorate of Special Investigations, a South African government agency, has been investigating allegations that Northern Corporate Investment Holdings, a former shareholder in CPS N, made payments to a trust through which the African National Congress in the Province and a former premier of the Province may have benefited. We have fully cooperated with the investigating authorities by providing requested documentation and have received confirmation that we are not in any way implicated in the investigation.

          There are no material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or of which any of our property is the subject.

This excerpt taken from the UEPS 10-K filed Sep 13, 2005.

ITEM 3. LEGAL PROCEEDINGS

     On July 20, 2005, the South African High Court had set aside the service level agreement between CPS and the Department of Health and Welfare of the Province (the “Department”). The court’s ruling followed an application by Empilweni Payout Services (LP) (Pty) Limited (“Empilweni”), a disqualified bidder for the current contract, asking the court, among other things, to set aside the action of the Limpopo Province Tender Board (the “Tender Board”) that awarded the contract to CPS. Empilweni’s application alleged that the Tender Board acted improperly in awarding the tender to CPS. Empilweni did not seek relief against CPS or allege wrongdoing by CPS. Empilweni’s application was opposed by the Tender Board, the Department, the Premier of the Province and CPS.

     The court’s ruling has been suspended as a result of a July 25, 2005 filing of leave to appeal the ruling by the Province, the Premier of the Province and the Tender Board. As a result, the contract has been reinstated pending the outcome of the appeal. Our legal counsel has also been orally advised by a representative of the Province that the Province views the contract as being in full force and effect and expects the parties to continue operating under the contract. The court had directed the Tender Board, the Department and CPS each to pay a portion of Empilweni’s costs of the action, which we believe would not be material to us. This order has also been suspended pending the outcome of the appeal.

Although the court set aside the contract, the court did not grant Empilweni’s request to direct the Tender Board to readvertise the tender or to readjudicate the tender, and in effect left it to the discretion of the Tender Board as to whether it wishes to invite new tenders. As a result of legislation passed in South Africa in 2004, the South African government is working toward the establishment of the South African Social Security Agency, the primary purpose of which is to consolidate at the central government level the administration of social welfare grants rather than continue to perform it at the provincial level. In light of this legislation, we believe that it is not likely that the Tender Board will decide to invite new tenders although there can be no assurance that it will not do so. If the Tender Board does decide to invite new tenders, the tender invitations will only be published after the resolution of the appeal process which is expected to take at least several months. We believe that the advertising, adjudication and award of such tender would likely take at least one year. We expect that we will continue performing under the Limpopo contract during this entire period.

     There have been reports in the South African press, first reported in 2004 and more recently in articles relating to the setting aside of the Limpopo contract, that the Directorate of Special Investigations, a South African government agency established to investigate bribery and corruption, has been investigating allegations that Northern Corporate Investment Holdings, a former shareholder in CPS, made payments to a trust through which the African National Congress in the Province and a former premier of the Province may have benefited. We have fully cooperated with the investigating authorities by providing requested documentation. We have no reason to believe that it or its officers, directors, employees or agents have done anything to warrant investigation in this regard or that it or they are targets of the investigation.

     There are no other material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or of which any of our property is the subject.

This excerpt taken from the UEPS 10-Q filed May 13, 2005.

Item 1. Legal Proceedings

             There are no material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or of which any of our property is the subject.

This excerpt taken from the UEPS 10-Q filed Feb 11, 2005.

Item 1. Legal Proceedings

             There are no material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or of which any of our property is the subject.

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