Share

Social grants firm threatens to sue MP who called them ‘a bunch of crooks’

accreditation
 Liezl Van der Merwe.
Liezl Van der Merwe.

The company Net1 and Cash Paymaster Services has threatened to sue an Inkatha Freedom Party member of Parliament who called them a “bunch of crooks” who were stealing from the poor.

MP Liezl van der Merwe confirmed receiving a letter from the company’s legal representatives on Thursday regarding remarks that she made during the last meeting of Parliament’s portfolio committee on social development.

At the meeting, Van der Merwe lashed out at the South African Social Security Agency’s decision to “extend an invalid contract from a ‘bunch of crooks’ who stole from the poorest of the poor”.

In this meeting, the social security agency told MPs that its only option was to approach the Constitutional Court to request that the invalidity order be suspended for at least a year. The Constitutional court in 2014 declared the contract awarded to CPA, an affiliate of Net1, invalid. This contract expires on 31 March.

Other opposition parties like the Democratic Alliance accused the agency and the social development minister of delaying Sassa’s takeover of the contract by forcing an emergency that would enable them to request an extension of the CPS contract to ensure that the nearly 17 million South Africans who were dependent on social grants would receive their money.

Law firm Smit and Sewgoolam Inc accused Van der Merwe of being “blatantly defamatory”.

In the letter, they wrote: “These remarks are blatantly defamatory. Failing a public apology on social media on or before February 10, as well as at the next parliamentary committee sitting, our clients will proceed with a claim for damages against you [in your personal capacity] as well as the Inkatha Freedom Party, whom you represent.”

Van der Merwe said she will not apologise.

“As an MP I have immunity in Parliament and am protected by the powers and privileges act, so an apology is not necessary.”

The letter devoted nearly five pages to an explanation of how the national payment system for social grants, according to the CPS and Net1, worked. The lawyers lashed out at Van der Merwe and said she was “probably ill-informed on how the social grant payment mechanism work”.

The company then took it upon themselves to “educate” her on the background. They wrote that CPS’s “administration function is fulfilled as soon as the grant is paid into the beneficiary’s account”. Thereafter the beneficiary was free to spend the money as he or she wished.

It also acknowledged that the national payment system wasn’t without complications, but that “every bank experiences disputes about debit orders on a monthly basis. Considering that debit orders of about R550 million a month are at stake, with which about two million grant recipients pay more than 1300 entities a month, it is unsurprising that some complaints may occur,” the lawyers wrote.

CPS added that the amount of disputed transactions involving grants beneficiaries were fewer than industry standards.

“What has been noted, however, is that complaints are decreasing on a monthly basis, which is indicative that beneficiaries are becoming financially astute. This was the objective of financial inclusion.”

CPS was of the view that the law and its amendments did not prohibit any deductions coming off beneficiaries’ account. This despite organisations such as the Black Sash having expressed concern about the possible extension of the contract, which it believed had resulted in numerous complaints about unauthorised, fraudulent and illegal deductions from beneficiaries’ bank accounts

“Any suggestion that Net1 or any third party for that matter processed authorised debit orders illegally, or stole money from beneficiaries by doing so, is simply untenable.”

The lawyers also referred to CPS and Net1 being made out as “villains”.


Alicestine October
Parliamentary journalist
Media24 Parliamentary Bureau
City Press
p:+27 11 713 9001
w:www.citypress.co.za  e: alicestine.october@24.com
      

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Voting Booth
Do you believe that the various planned marches against load shedding will prompt government to bring solutions and resolve the power crisis?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes
21% - 103 votes
No
79% - 397 votes
Vote