CPS director Serge Belamant: We work for profit

CPS director Serge Belamant says his company's profit will be at least 18% if it reaches an agreement on grant payments. (Sunday Times)

CPS director Serge Belamant says his company's profit will be at least 18% if it reaches an agreement on grant payments. (Sunday Times)

Cash Paymaster Services (CPS) director Serge Belamant said his company’s profit from a contract with the South African Social Security Agency (Sassa) will be at least 18% if it reaches an agreement on grant payments.

Standing inside the Constitutional Court on Wednesday, Belamant spoke candidly to the Mail & Guardian during a 15-minute break in the Constitutional Court application brought by civil rights organisation Black Sash over concerns that social grants may not be paid on April 1.

One of the debates in the court on Wednesday morning was that CPS should not benefit from an unlawful contract. Freedom Under Law, in its application to the court, asked the justices to prevent CPS from benefiting from its 2012 contract with Sassa, which the court declared invalid in 2014.

Belamant said CPS is a business and it works towards a profit.

“We’re not a government, we are a company. We work for profit,” Belamant.

Belamant told the M&G that CPS would work towards a 20% bottom line profit, but ultimately it wants at least 18%.
Its investors, however, may not be entirely satisfied with that amount.

“It’s actually low for our investors. They would prefer 30% or 40% [profit]. Investors always want more, government always wants less,” Belamant said.

But earlier today, FUL lawyer David Untehalter said CPS is currently an organ of the state and has a constitutional obligation and may not benefit from an unlawful contract. 

“CPS has no right to benefit from its obligation. It may not profit as a result of the unlawful contract it enjoyed in the past,” Unterhalter told the justices.

The other options
The South African Post Office told justices at the court on Wednesday that it had notified Sassa on March 1 that it would be able to take over grant payments in one month at a lower cost than CPS.

In court papers, the Post Office submitted an answering affidavit to CPS’s claims that it could not do what it guarantees. The Post Office has said it will charge Sassa R20 for every social grant beneficiary, whereas reports indicate CPS will charge R25. CPS has denied the R25 charge, but has said it will increase its rate from what it previously was.

But Belamant has scoffed at the the Post Office’s submission.

“Is there anyone else right now who can do the job? The answer is no, except for the Post Office and the pigeons that they want to use,” he said.

“You know, I think they want to fly the money with pigeons and that might work better than the way they do the letters at the moment.”

On Tuesday night, Belamant said CPS would be unable to pay grants unless an agreement was reached with the state on Wednesday.

On Wednesday afternoon, the CPS director said the treasury must make funds available by Thursday for grants to be paid without interruptions.

But also under dispute are deductions that are made from beneficiaries’ grants. Black Sash argued on Wednesday morning that CPS was distributing personal information from beneficiaries to their subsidiaries and that microloans were being deducted from their grants without proper authorisation.

Belamant didn’t respond directly to the allegation, but said instead that Net1 loans are “50% cheaper than anyone else”.

“If anyone can come to a price which is even close to ours, we will pay it back,” he said.

Net1’s products include microloans, insurance policies and airtime.

Constitutional duty to pay grants
CPS is under a constitutional obligation to ensure grants are paid. It admitted as much to the justices in the court when it made its submission.

Belamant said outside the court that “if the court allows us to do it”, CPS will continue to pay grants.

Judgment on the matter was reserved and court adjourned.

See the full interview below.

Ra'eesa Pather

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