Bundle of contradictions: Net1 chief executive Serge Belamant says his company stays true to its values.
Serge Belamant is brilliant. Many people who have dealt with him say so. His list of patents going back decades – some visionary – show as much. That he has earned a tidy fortune, $3-million last year alone, just underscores his worth.
Belamant is also a fool, by his own admission. In 2003 he was “awarded” an honorary PhD that came to haunt him in 2016, when it emerged the institution his degree came from had been fake.
Belamant is a force for good, some say: the company he created and runs is the only one capable of handling the mammoth task of paying 17-million social grants every month.
Belamant is clearly evil, others hold: he makes a fortune by exploiting poor, vulnerable people.
And, come April, Belamant will be one of two more mutually contradictory things: the saviour who ensured that, shocking government incompetence notwithstanding, social grants continued to be paid – or the profiteer who exploited a crisis to access, yet again, the public purse.
Like the rest of his reputation, there may never be clear consensus on which it is – nor will it bother Belamant too much. Whatever his detractors say, he told the Mail & Guardian, his Net1 will continue to provide the cheapest possible financial services to the poorest in society, and stick to its own morality.
“We have our own views in terms of what’s right and what’s wrong, not in terms of the law but in terms of what should be done, and we’re not going to give up on those ideas,” he said.
Those ideas include refusing to sell lottery tickets through its transaction services, even though Belamant holds technology patents related to gambling and betting. It also includes continuing to provide what Belamant insists is the cheapest short-term, unsecured loans available in South Africa, even though these have been slammed as part of a rapacious scheme to separate social grant recipients from their money.
The latter is sure to be a sticking point in last-minute negotiations on the payment of social grants for at least the next year, with the social development department vowing it will not accept any contract unless it excludes any possibility of deductions from social grants.
But for Belamant to accede to such a demand is unlikely. For 20 years his business philosophy has been that loans, and other financial services, are an integral part of financial inclusion and of his business model.
In 1999 Net1, then better known as Aplitec, bought a subsidiary of First National Bank named Cash Paymaster Services (CPS). In the same month it also bought a controlling interest in micro-lender MoneyLine. The company’s current contract, for the outsourced distribution of grants, is worth more than R2-billion a year.
“The people who need loans are poor people,” Belamant says simply. The trick, though, is to be symbiotic rather than parasitic, because sucking people dry with interest payments is not a winning long-term strategy. There are many, however, who believe that he and his company are parasites, if Teflon ones.
In the late 1980s, the French-born Belamant took advantage of sanctions to develop home-grown information technology solutions. He claims to have driven the Saswitch system, which allows customers of one bank to use the ATMs of others.
By the late 1990s, Belamant was looking for a market for cashless payments using smart cards, and tried to recruit taxi operators. At roughly the same time, the taxi industry went through an upheaval that saw several claimed assassinations.
“There is no doubt in my mind that the money at stake with the whole smart card thing was at the bottom of some deaths,” says one person who analysed the sector at the time.
Today, Belamant waves away this suggestion, just as he waves away all allegations made since.
The company is facing a claim, initiated by Corruption Watch, that it received an undue extra R319-million from the state for allegedly registering grant beneficiaries beyond the scope of its tender. Judgment is also pending on whether it is lawful to make deductions, such as for funeral policies and prepaid electricity, from grants before they are disbursed.
In the past, Net1 has been accused of diverting money to the ANC and of dodgy dealings with black empowerment partners. It has also been investigated for fraud by the Hawks and United States authorities.
Belamant says neither he nor his company has ever been found guilty of any serious misdeed. Even when the Constitutional Court ruled that its social grants tender was awarded unlawfully, the criticism was only for the state, he said.
He believes where there is money, there will be allegations. “Isn’t that a typical South African thing? You’ll probably find because corruption does take place in general, why would we not be corrupt if everyone else is corrupt? That is what people see.”