Troubled Sizwe Hosmed medical scheme, already floundering under curatorship, is now under fire from the Council for Medical Schemes (CMS), which has accused it of multiple irregularities, reports Business Day.
The allegations include payouts for duplicate claims that potentially run to more than R500 000, procurement irregularities, and misuse of the scheme’s corporate credit card by its former principal officer.
The scheme’s administrator, 3Sixty Health, and former principal officer Simon Mangcwatywa, have denied the allegations levelled at them.
CMS Registrar Musa Gumede filed an affidavit last week in response to an application launched by Sizwe Hosmed’s former board of trustees seeking to have its curator Lebogang Mpakati removed and the curatorship rescinded.
Sizwe Hosmed, South Africa’s eighth-largest open medical scheme, was placed under curatorship last year after the failure of the regulator’s efforts to stabilise its finances using statutory management. A scheme’s board of trustees remains in place during statutory management but is removed if it is placed under curatorship.
Now, Gumede has resisted the former board of trustees’ efforts to end the curatorship, but agreed Mpakati is not fit to hold office, as a provisional sequestration order was granted against her late last year.
Last Wednesday, he filed a counter application asking the court to remove her as curator and appoint Ian Fleming instead. Fleming was previously the curator of Thebemed Medical Scheme.
Gumede said in the papers that when Mpakati applied to be appointed to the CMS’ curatorship and statutory management panel, she had submitted an affidavit dated October 2023 stating that there were no pending legal cases that might cast doubt on her fitness to hold office.
Mpakati, who was appointed provisional curator of Sizwe Hosmed in September 2025, informed the registrar on 15 January that judgment had been handed down in December granting a provisional sequestration order against her estate, he said. The judgment also included a provisional liquidation order against her business rescue firm, Indalo Business Consulting.
Both provisional orders stem from legal action initiated in March 2023.
The judgment granting provisional liquidation and sequestration orders contained details of an overpayment for her fees that placed her fitness and propriety in question, he said.
But last week Mpakati told Business Day it was a separate matter that had no bearing on her role as curator.
On Friday, she said she would oppose her removal as curator and share evidence with the court demonstrating she had fulfilled her fiduciary duties towards the scheme, adding that she would not oppose the matter further if the court ordered her removal.
The matter was due to be heard this week.
In making his case for Sizwe Hosmed to remain under curatorship, Gumede cites the findings of two reports into the scheme’s affairs, previously unpublished.
The first, from TFS Africa Forensics, identified potential duplicate claims – in which service providers were paid twice or more for the same claim – of more than R522m. It also flagged more than 245 000 stale claims totalling R81m that had been paid by the scheme’s administrator, 3Sixty, between July 2023 and February 2024.
Claims are deemed stale if they are more than four months old and medical schemes usually consider them ineligible after this stage.
Khandani Msibi, 3Sixty CEO, said the administrator had not seen the TFS Africa Forensics report and the allegation that the organisation had paid out duplicate claims of more than R500 000 was unfounded.
A previous report by KPMG alleging more than R300m in duplicate claims had been wrong and the figure was subsequently reduced to R17m, he said.
He accused the registrar of going on a “fishing expedition” and questioned why the scheme and 3Sixty had not been allowed to respond to the allegations in the reports.
Former board of trustees chair Luyolo Makwabe declined to comment.
The second report, from Phandahanu Forensics, alleges Mangcwatywa misused the scheme’s corporate credit card for personal expenses, including car rentals while on leave, flights for relatives and traffic fines.
Mangcwatywa denied the allegations, saying he had submitted detailed records and receipts for an alleged R1.1m in expenses to an internal investigation.
He had demonstrated the expenditure aligned with the scheme’s policies at the time and all charges against him had been withdrawn in 2024.
The Phandahanu report also alleged irregularities in the appointment of a company called Kwandlunkulu for scheme elections and that payments were made to service providers without supporting contracts.
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Sizwe Hosmed to launch fraud probe
Sizwe Hosmed in financial trouble as other schemes hike prices