The electronic distributor of South Africa's social grant payments, Net1 UEPS Technologies [JSE:NT1], says its chief executive officer Serge Belamant is a "victim" of a fake PhD scandal.
Net1 division Cash Paymaster Services (CPS) won a R10bn grants tender from the South African Social Security Agency (Sassa) in 2012. CPS currently helps Sassa electronically distribute grant payments to over 10 million recipients in South Africa.
For years, Serge Belamant - who has been Net1's CEO since 2000 and the chairperson of the company's board since 2003 - has referred to himself as Dr Belamant.
But Net1 said two board members conducted a review into Belamant's qualifications amid allegations on social media over the validity of the CEO's "honorary PhD in Information Technology and Management conferred by Burkes University".
"In light of the review, Belamant and the board have come to the conclusion that it is likely that Belamant was the unfortunate victim of a scam and that the honorary degree was not legitimate," said the company in its statement.
Net1 said based on its review, "it appears that in early May 2003, Belamant received an email from a person who appeared to be associated with 'Burkes University' stating that he had been 'short-listed by the Honorary Doctorates Committee' for the conferment of an honorary doctorate degree".
The company said that after receiving this correspondence, Belamant responded by "asking for details about the selection criteria and process" and he received a response that discussed the criteria, which "appeared to him to be relevant to the awarding of an honorary degree".
"Belamant provided the information that he was asked to submit, including proof of his memberships of professional societies, his academic records, patents he filed, his nomination for the South African chapter of the World Entrepreneur of the Year award and his work published in information security textbooks," said the company.
Net1 said the CEO then said he made a donation to "what he believed was a foundation associated with Burkes University" and that on May 23 2003, the honorary degree was awarded to Belamant.
But the company said that "attempts to obtain information about Burkes University revealed that, according to the 'Higher Education Degree Datacheck' website, Burkes University is currently referred to as 'not a valid UK degree awarding body'."
Burkes University also doesn't have a website.
Despite the scandal, the Net1 board said it "believes Belamant followed the honorary degree award process in good faith and that at the time, Belamant did not doubt the integrity of the process or the validity of the degree".
The fake PhD scandal is the latest controversy to rock Net1, which is listed on the JSE and New York's Nasdaq.
In 2014 the Constitutional Court ordered Sassa to reissue the tender amid the agency's "irregular" conduct in awarding the contract to CPS.
Net1 has also come under fire for selling mobile airtime and loans to social grant recipients.
Amid controversies dogging Net1, the company announced last year that it doesn't plan to reapply for the Sassa tender.
CPS is subsequently expected to hang on to the contract until its expiry in 2017, as Sassa told Fin24 last year that it plans to take over the social grants distribution thereafter.