Fintech company threatens NSFAS with court action

Calls are mounting on the National Student Financial Aid Scheme (NSFAS) to make public its report on corruption and irregularities in the awarding of tenders to four fintech companies.

The scheme announced on Wednesday that a report by legal firm Werksmans Attorneys and advocate Thembeka Ngcukaitobi found that its suspended CEO, Andile Nongogo, had a hand in the appointment of companies to disburse allowances to students at tertiary institutions.

The tenders were awarded to fintech companies eZaga, Tenet Technology, Coinvest and Norraco to pay out billions of rands in student allowances.

Nongogo, according to the report, played a role in handpicking the companies, some of which he had direct links with from his previous job as CEO at the Services Sector Education and Training Authority (Services Seta).

The report also found that the bid specifications were amended to include fintech companies, which resulted in drastic changes in the mandatory requirements of the original bid.

One of the fintech companies, eZaga, has called for the NSFAS board to release the full report, saying it is engaging its legal counsel to address and respond to the accusations appropriately.

CEO Saud Ally said in a statement that the company is disappointed by NSFAS’ decision to terminate its tender, denying any association with or connection to Nongogo before the tender was awarded.

“eZaga was awarded the tender having met all the necessary tender specifications and has consistently delivered on these requirements,” said Ally in the statement.

The report found that Nongogo appointed Dr George Chirwa – who has links with eZaga Holdings and its subsidiary eZaga Remit; Africawide Consulting, and Africawide Foundation – as technical advisor.

Not only was the appointment of Chirwa in contravention of NSFAS’ supply chain management policy, but Chirwa had a relationship with some of the companies that were appointed at Services Seta during Nongogo’s tenure.

The South African Federation of Trade Union has also called on the NSFAS board to make public the report.

Spokesperson Trevor Shaku said by Thursday evening, the federation had not received any feedback regarding the release of the full report.

DA enters the fray

DA MP and member of the portfolio committee on higher education, science, and innovation, Chantel King, said the party will request the urgent appearance of the (NSFAS) board before the parliamentary committee to determine the implications of the terminations on students.

“Given the NSFAS board’s decision to terminate the contracts of all four service providers, we need to know the scheme’s plans to ensure that no students would be adversely affected,” she said.

“We need to be briefed on how NSFAS will implement direct payment once the contracts of the four service providers are cancelled, and whether a new bid process with new service providers [should] be considered.

“We cannot allow students to be placed in situations again where they might be saddled with non-payment of allowances, which at this stage into the examinations might lead to student unrest and mental anguish for students and parents alike.”  

NSFAS spokesperson Slumezi Skosana had not responded to question about when the board intends to make public the report.

Nongogo has been given until Monday to respond to a notice to terminate his contract.

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