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Two South African Companies Dodge FCPA Charges

Jaclyn Jaeger | June 24, 2015

The Securities and Exchange Commission this month closed two separate investigations into potential violations of the Foreign Corrupt Practices Act without bringing any enforcement actions. Each investigation involved alleged bribery payments made by South African companies.

In the most recent case, the SEC on June 22 informed South Africa-based gold mining company Gold Fields that it had closed its FCPA investigation and would not be bringing an enforcement action, according to a statement released by the company. The SEC launched its investigation in 2013 after reports surfaced that Gold Fields intended to bribe African National Congress chairwoman Baleka Mbete in exchange for a mining license.

In the second case, the SEC informed South Africa-based Net1 UEPS Technologies on June 8 that it had closed its FCPA investigation and would not be bringing an enforcement action, according to a Form 8-K released by the company, a provider of payment solutions and transaction processing services.

In that case, the SEC launched its investigation in 2012 following the award of the SASSA national contract to Net1 in 2012, according to a statement by Net1 CEO Serge Belamant. The investigation commenced “largely as a result of one of the losing bidders for the contract, Barclays Africa’s subsidiary AllPay, referring unsubstantiated South African press articles alleging irregularities in the tender process to the U.S. Department of Justice,” he said.

“We believe that AllPay was responsible for instigating those media allegations,” Belamant added. This resulted in the Justice Department and SEC initiating investigations into alleged FCPA and disclosures violations, he said.

Belamant added that the letter from the SEC is “an important step in the company clearing its name and is in line with the total absence of any findings of irregularities against Net1 by any South African court or regulator resulting from actions pursued by AllPay over the past three years.”

The South African Police’s Commercial Crimes unit launched a separate investigation into the allegations, which is expected conclude “shortly,” the Form 8-K stated. The U.S. Justice Department’s investigation remains open.