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Cape Town – Net1 has terminated its two-year consulting agreement with its former chief executive Serge Belamant, it said in a statement on Monday.
Net1’s board of directors issued Belamant a 90-day written notice to terminate his agreement, which saw the former CEO being paid R645 000 a month for his consulting service.
Belamant, who retired as CEO of Net1 on May 31 2017, will not receive any termination payments to beyond the 90-day notice period, the company said.
“We have managed a smooth transition and thus believe there is limited value to continuing with such agreement for a lengthy period of time.” said Net1 chairperson Christopher Seabrooke.
“We discussed our decision with Mr Belamant, who concurred with our conclusion. Our parting is cordial and we wish him success in his future endeavours after the remaining period of the consulting agreement with us.”
Allan Gray, Net1’s second-biggest shareholder, was outraged by the financial settlement claimed by Belamant upon his retirement.
Net1 agreed to pay Belamant R104m and about a 14% premium on more than 1 million shares that he owned after he agreed to step down amid a controversy over a contract it holds in South Africa to distribute billions of rand of welfare payments to 17 million people.
In June, it also agreed that Belamant will be paid R645 000 a month to consult for the company after his early retirement. Net1’s second-biggest shareholder Allan Gray said it was outraged and the biggest investor, the International Finance Corp, said it was frustrated.
Allan Gray told Bloomberg in May that the company was "very surprised that Belamant was able to negotiate such an extravagant deal after such broad public censure and believe that it is unjustified given current circumstances”.
Net1 won a contract in 2012 to distribute welfare in South Africa. Two years later, the Constitutional Court ruled the contract invalid and instructed the South African Social Security Agency (Sassa) to find a new provider. When it failed to do so by March this year, the court allowed the contract to be extended until 2018 under stringent conditions.
“For a number of years we have been concerned about multi-million rand ex-gratia severance payments made to executives and that shareholders are unable to block such payments,” Allan Gray’s chief investment officer, Andrew Lapping, said in the statement.
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