To: Allan Gray
Allan Gray, Net1 Hands Off Our Grants
Stop Net1's unlawful grant deductions and accessing the grant recipients database.
Why is this important?
Allan Gray who, through various accounts, holds 15.6% of the issued shared capital of Net1. Allan Gray, similarly to other asset managers, has a publically available policy on how it incorporates sustainability considerations, such as environmental, social and governance issues, into its investment decision-making. Among the factors it lists, as being taken into account when making investment decisions, are the corporate culture and ethics of the companies it invests in. This is interesting given the unethical nature in which Net1 has been stealing from the poor through deductions made from social grant recipients.
Most asset managers forget that they are the custodians of the savings of many South Africans who would be appalled to know that they own shares in Net1 which, it appears, exploits the poorest strata of society to make a profit.
The Sassa saga was an opportunity for Allan Gray and other owners of Net1 to stand up and intervene in the manner in which the situation was handled by Net1 and in the pricing strategies it deployed.
They might not be able to change the business model of Net1 through shareholder activism alone. They can, however, choose not to hold its shares, based on ethical considerations. If more shareholders followed this approach Net1 would be forced to change its business model. 17
The Sassa saga is more than a failure of government to look after the interests of the poor. It is a failure by corporate South Africa to do the same.
Sassa Saga: How CPS cross-sells microloans, insurance and services to poor grant recipients, Magda Wierzycka for The Daily Maverick. March 7, 2017.