‘Really unfortunate’ that GovChat dragged into SASSA, CPS saga, says shareholder

GovChat shareholder, Capital Appreciation, says it is unfortunate that some of its directors’ past association with Net1 has cast a cloud over its relationship with the South African Social Security Agency, which it says is harmless.

Last month GovChat was named as one of the companies that will support SASSA by digitising the application process for unemployed South Africans to receive a R350 grant for the next six months. However, Capital Appreciation chairman Motty Sacks’ historical links to Net1 – the company that owned the disgraced Cash Paymaster Services, which the Constitutional Court found was awarded a R10 billion tender irregularly – ruffled some feathers.

On Monday, Capital Appreciation CEO Bradley Sacks said Motty’s role as Net1 founding chairman, a position he left 12 years before SASSA would sign the controversial contract with CPS, did not justify questioning of GovChat’s work.

“It is really unfortunate that work which was done by GovChat as a social responsibility initiative, that was done without remuneration or compensation from SASSA, some really important work for our country, was manipulated in a way to suggest that there are some untoward connections,” said Sacks during Capital Apprecation’s results presentation. 

He said the tech startup, which describes itself as a social media platform that facilitates citizens’ engagement with government, had a long-standing relationship with the Department of Cooperative Governance and Traditional Affairs. It was out of those engagements that SASSA welcomed GovChat’s help in digitising the grant applications, said Sacks.

He said since 1 March, when GovChat launched its platform – initially intended to facilitate citizens’ communication with local governments – 90 million messages have been transmitted over the GovChat platform.

The Covid-19 unemployment grant applications in May has seen the number of users shoot up to more than 2.5 million.  The company received more than 1.9 million applications and has so far been able to handover about 1 million of these to SASSA. GovChat has also developed tools for screening, symptom tracking and testing referrals which could be useful to the department of health as well.

So far, GovChat said it has not been charging government for any of its services and has been kept afloat by grant funding. Sacks said the company is looking at monetizing GovChat’s work.

“GovChat’s monetization strategy is a strategy which is evolving. You can see by the user data that the GovChat platform is generating and the nature of the reports that it is able to deliver to government, that there is a tremendous opportunity to be able to derive value and deliver value,” said Sacks.

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