Cash Paymaster Services (CPS) will go into liquidation, after a bid to have it placed under business rescue failed.
The South African Social Services Agency (Sassa) won’t back down over a debt it is claiming from CPS, making business rescue unlikely to succeed, according to a report in GroundUp.
CPS is the company that was previously contracted to pay out social grants on behalf of Sassa.
When the contract was unlawfully extended, the Constitutional Court ordered CPS to repay the profits earned.
While the exact amount of the profits is disputed, Sassa says they are a liability, and there is no hope of business rescue succeeding since CPS owes its profits to Sassa.
CPS’s parent company Net1 applied for CPS to be placed in business rescue in April.
However, with its biggest creditor, Sassa, not supporting the move, it has instead decided to place itself in liquidation.