Battle to control R1.2bn municipal medical aid back in court

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The battle to control the beleagured South African Municipal Workers Medical Scheme, with more than R1.2bn in its coffers and more than 80,000 members, is playing out in the Western Cape High Court. According to a Weekend Argus report, two parties are seeking the removal of Duduza Khosana, a court-appointed curator charged with handling and restoring the affairs of the beleagured South African Municipal Workers Medical Scheme. This comes less than a month before Khosana is to present her final report.

The report says a slew of allegations have been levelled against Khosana, ranging from paying herself an exorbitant salary to purging executive members of the scheme and failing to execute her duties.

The scheme was put under temporary curatorship in May by acting Judge Pearl Andrews after the Council for Medical Schemes approached the court with concerns about its management. It came to light that the board of trustees had not been properly constituted and the board was dissolved.

The report says problems within the scheme emerged from factions within the South African Municipal Workers Union, which is entitled to appoint nine out of the 19 trustees. But the process was mired in controversy over allegations that feuding factions wanted to control who sat on the board.

Khosana was appointed as interim curator until 30 July, tasked with taking over operations including managing money, investments, shares and other assets owned by the scheme and investigating allegations of financial and governance irregularities. She was to recommend appropriate action and report back to court. She was also tasked with arranging an annual general meeting which would appoint new trustees.

But, the report says, two months into her appointment Sipho Kabane, the registrar who had recommended Khosana, penned a letter asking that she resign. Two weeks before that Khosana had suspended five members of the executive team on allegations ranging from sexual harassment to staff intimidation and working against her.

Andre Maxwell, former deputy chair of the trustees, filed an application asking the court to remove her last month after Kabane approached the court to request Khosana’s curatorship be extended to 25 October. Then Kabane flip-flopped and filed a court application seeking Khosana’s removal, saying she had refused to resign.

In his application Kabane said: “Instead of curing the pivotal irregularity and undertaking her obligation to take all steps necessary to convene a special general meeting, (Khosana) mired the scheme in all kinds of controversies.”

Kabane said Khosana had: failed to submit monthly reports, having submitted only one without documents to substantiate conclusions; failed to provide information about her PA’s salary to ensure it was in line with the others in the scheme; failed to submit forensic reports relating to the scheme’s banking accounts and payments to service providers; and failed to provide the names of those she hired and their fees as well as a proper plan on how she intended to address concerns that led to the scheme being placed under her care.

The report says Khosana has hit back at her detractors in her responding court papers, saying that those who were hindering her investigation at the scheme were trying to remove her to avoid facing the music. “The persons facing disciplinary are using this application to try and avoid having to submit to the process and account for their conduct.”

Weekend Argus report

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