Cash Paymaster Services, the defunct South African fintech and subsidiary of Lesaka Technologies that administered welfare payments to millions of the country’s poorest citizens, has been ordered by the Constitutional Court to repay R81.3m ($4.96m) in profits earned under a government contract declared invalid more than a decade ago.
The ruling, handed down on 8 April 2026, closes one of the most protracted legal battles in South African history — twelve court appearances since 2014, ten parties, and a financial dispute that at various points ranged from $15.4m to estimates approaching $65m depending on which auditor you believed.
The judgment has immediate implications for the broader ecosystem of technology companies that build, operate and profit from government-facing infrastructure across the continent.
How it started
The case traces back to 2012, when the South African Social Security Agency (SASSA) awarded CPS a national contract to administer social grant payments — a programme reaching more than 18 million beneficiaries and one of the largest cash transfer systems on the African continent.
In 2013, the Constitutional Court declared the tender award invalid. SASSA had failed to properly verify CPS’ empowerment credentials, and the bidding process had been structured in a way that eliminated competition at a critical stage. The fatal flaws lay with SASSA, not CPS.
The problem was that millions of vulnerable South Africans depended on the payment system. There was no replacement ready. The court suspended its own declaration of invalidity and ordered CPS to keep running the system — first for the remaining five-year contract term, then for a further 12 months, and then for a final six months ending in September 2018. Throughout, the court signalled that CPS would have to account for any profits made. What it did not resolve was how much, or what would happen to them.
That question took another eight years to answer.
The numbers in dispute
CPS commissioned audits from KPMG and Mazars covering the three extension periods. Their combined figures showed a net profit of R252.6m ($15.4m). An independent verification by RAiN Chartered Accountants, commissioned by SASSA, suggested the true figure could be as much as R800m higher.
The gap drove years of litigation over documents, accounting methodology and the scope of the court’s original orders. A referee was appointed in December 2024 to resolve the factual disputes but the process collapsed within months over disagreements about who would pay for it.
By the time the matter returned for a hearing in May 2025, CPS had been in final liquidation for nearly five years. SASSA had proved claims against the insolvent estate exceeding R700m ($42.7m). The South African Revenue Service had submitted further claims of R401m ($24.5m). The liquidator’s report was unambiguous: even without the SARS claims, there was not enough in the estate to pay SASSA in full.
The court concluded that pursuing a more precise profit figure through further litigation would be an exercise in futility.
The Lesaka question
Running through the judgment is a question the court declined to fully answer: what role did Lesaka Technologies play, and did it benefit from the invalid contract in ways never properly accounted for?
Lesaka — formerly NET1 Applied Technologies, now a publicly listed fintech operating across multiple African markets — was CPS’ parent company. Their businesses were, by the court’s description, deeply intertwined. They shared a company secretary. CPS paid Lesaka royalties and service fees. No separate accounting was maintained between the two entities in respect of the SASSA contract.
RAiN raised concerns about cost-shifting and profit-shifting between CPS and Lesaka — the suggestion being that expenses had been inflated and income deflated through intra-group transactions, moving value up the corporate chain to the parent. The disputed B-BBEE expenditure of R437m, a large portion of which the court disallowed, sat at the centre of these concerns.
The court stopped short of making findings against Lesaka. The liquidator, after an extensive insolvency enquiry, found no viable prospects of recovery from Lesaka. The court also noted, with pointed criticism, that RAiN and Treasury appeared to have proceeded largely in disregard of evidence already gathered at the enquiry — including KPMG and Mazars’ working papers, which Treasury had been offered access to but never examined.
Lesaka has not been ordered to pay anything. But the judgment leaves a visible question mark over the adequacy of accountability that governed the relationship between the two entities throughout the contract period.
What it means for govtech
Beyond the immediate financial outcome, the judgment consolidates case law with significant implications for technology companies operating in the government contracting space.
The most consequential legal development from the AllPay litigation — as the series of cases is collectively known — is the 2014 ruling that CPS was itself an organ of state. The basis was not ownership or control by government, but function: CPS was performing a fundamentally public task, and that made it publicly accountable regardless of its private ownership.
That principle has now been reaffirmed across twelve judgments over twelve years. For technology companies, the warning is direct. Any company that becomes operationally central to a public service — in payments, identity verification, health data, or social infrastructure — risks being treated as a quasi-public entity under the law. Private ownership will not insulate it from constitutional obligations or orders to account for profits under contracts later found to have been unlawfully awarded.
The judgment also confirms that profits from an invalid government contract are not automatically protected, even where the contractor was innocent of any wrongdoing. The court acknowledged the line of cases allowing innocent contractors to retain profits in appropriate circumstances, but distinguished them sharply from CPS — a company placed on notice from the outset that its profits would face scrutiny and potential repayment.
For investors, the case signals that due diligence on govtech deals needs to go beyond standard procurement checks. The structure of intra-group transactions, the documentation of related-party costs, and clean separation of accounting between a contracting entity and its parent are all matters this case shows can become the subject of prolonged and expensive litigation if a contract is subsequently challenged.
For founders, the more fundamental lesson may be simpler: winning a large government contract in a sector that touches constitutional rights is not purely a commercial opportunity. It is an assumption of public responsibility — one that courts may enforce long after the contract has ended and the company has been wound up.
Finality
“It is time to bring an end to this relentless, seemingly interminable litigation,” wrote Justice Majiedt, in a judgment in which all nine justices concurred. “This is the twelfth time that a case involving the illegal SASSA tender has been in this Court.”
Whether SASSA recovers the full $4.96m remains uncertain. The liquidator’s report suggests that if SARS succeeds with its claims, concurrent creditors including SASSA may receive nothing at all.
The practical financial outcome of twelve years of litigation may therefore be considerably smaller than even the adjusted figure suggests. But the legal framework the AllPay cases have built — around public accountability, profit scrutiny, and the constitutional obligations of private companies delivering public services — will outlast CPS by a considerable margin, and is now firmly part of the landscape any technology company must navigate when it chooses to do business with the South African state.
Ultimately, the Taxpayer will bear the loss, as the state (SASSA) is unlikely to recover the full amount from a broken company with few assets.
Based on the judgment of the Constitutional Court of South Africa in Black Sash Trust and Another v Minister of Social Development and Others [2026] ZACC 12, handed down on 8 April 2026. Exchange rate: R1 = $0.061 (8 April 2026).