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The Company provides universal electronic payment system as an alternative payment system for the unbanked and under-banked populations of developing economies.
They have a very bad relationship with the new government in SA which is their major customer of nearly 70% of revenue. Their alliance was with the previous government and this does not sit well with the people in charge now. Their contract terms was renegotiated down which had the result of their revenue and earnings being reduced by 25%. Reading the 10K, the risk is there that it may be renegotiated down further in coming years, as their fees is way above other electronic means available to the government. They are involved in several court cases with the government, their major customer, not a good thing for business. They are in a bit of panic and have done some shocking transactions the last 2 years in trying to diversify the risk. Their record of capital allocations was very poor with the acquisition of BGS and the investment in Finbond. They had to write off a major amount of goodwill from the BGS acquisition in the last quarter (with more to come) and the Finbond investment is marked as level 3 assets, meaning they don't want to mark down that investment to marked value. Then lastly, the management is helping themselves richly with share options by adjusting their own targets set, all while ordinary shareholders have seen NO value in their investment the last 5 years. They do this by buying back stock to reach their eps targets, but the stock keeps going down and shareholders get no dividends.
major scam on tender grant....just reported.oops! Down we go...An african newspaper reports:http://mg.co.za/article/2012-03-09-zumas...What a mess of a scam...only in africa
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