Net1 UEPS Technologies, the company facing a corruption probe by US authorities, including the Securities & Exchange Commission (SEC) and the Federal Bureau of Investigation (FBI), has itself filed a R478m lawsuit against Absa subsidiary AllPay.

AllPay, a unit of banking group Absa, lost a bid to Net1 to provide a system for the payment of social grants in South Africa. The contract, worth R10bn, was awarded to Net1 subsidiary Cash Paymaster Services (CPS) by the South African Social Security Agency (Sassa). But a month later, AllPay filed legal papers seeking to have the tender reviewed and set aside, arguing that Sassa’s tender process was riddled with inaccuracies. It argued that the terms of the tender were changed shortly before the tender process closed and that its core was lowered to ensure CPS would win.

Now, Net1 has filed suit against AllPay at the high court in Johannesburg, alleging that its rival “wrongfully and unlawfully” provided false information to the South African media and that this formed the basis of “false media reports which alleged or implied that that the Sassa tender process was tainted by corruption through bribes by … CPS.”

The company argues that AllPay’s intention was to damage Net1’s reputation. It accuses it of making a report available to the US department of justice, whose criminal division, along with the FBI, has begun a probe into whether Net1 or any of its subsidiaries, including its officers, directors, employees or agents, violated the US Foreign Corrupt Practices Act or other US federal criminal laws.

Net1 has also received a letter from the SEC advising it that it is also conducting an investigation into the company. The company says the SEC letter states that the probe is a non-public fact-finding inquiry. — (c) 2012 NewsCentral Media