The government is facing a counter legal challenge in a dispute with Net 1 UEPS Technologies with a rights group demanding that it protect welfare recipients from companies that are allegedly selling the nation’s poorest people goods and services they don’t need and deducting payments from grants paid to them by the state, says a report on the Fin24 site.

Black Sash Trust, a human rights activist group, applied to the Gauteng High Court (Pretoria) to intervene in cases between the state and Net 1 and its associates. Net 1 has a contract to distribute welfare grants on behalf of the government, while companies in which it has shareholdings, and board members in common, sell grant recipients services ranging from loans to mobile phone air time.

‘The state is under a constitutional and legal obligation to protect the beneficiaries of social grants from exploitation,’ Black Sash, which is represented by the Johannesburg-based Centre for Applied Legal Studies, said in court papers. It should be ordered to ‘make regulations under the Social Assistance Act that adequately protects social grants from exploitation in a manner that prevents grant beneficiaries receiving full benefit from them,’ the group said.

Full Fin24 report