CMS to be probed for maladministration and corruption

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The Special Investigating Unit (SIU) is poised to launch an investigation into possible maladministration and corruption at the Council for Medical Schemes (CMS) and is likely to extend into the private sector, reports Business Day.

The report says the development takes place in parallel with an investigation the CMS plans to conduct into allegations of corruption against the head of its complaints and investigations unit head Stephen Mmatli, who it suspended last week. The CMS’s move has already shaken the industry, as it raises questions about whether the regulator has been turning a blind eye to matters that should have been scrutinised, or directed inappropriate inspections at schemes and administrators

SIU head Andy Mothibi is quoted in the report as saying that whistle-blowers had approached the SIU alleging impropriety at the CMS’s compliance and investigations department, headed by Mmatli. He declined to provide details, saying only that they related to the processes handled by the department and included the allegation that an inspection had been stopped for no apparent reason. “I’m anticipating the (investigation) into the CMS could point further, into private-sector players,” he said.

The report says the SIU is expected to have prepared a draft proclamation for President Cyril Ramaphosa to sign by the end of the week, said Mothibi. The draft proclamation would be submitted to the justice minister early next week, and then to the Presidency, he said. Once an official proclamation has been published in the Government Gazette, the SIU will be authorised to begin probing the affairs of the CMS.

The report says the CMS issued a circular to industry stakeholders on Friday, announcing that it had placed Mmatli on precautionary suspension pending the outcome of an investigation into alleged corruption and misconduct. “We received anonymous tip-offs alleging, among other things, that Mr Mmatli has been involved in corrupt relationships with organisations regulated by the CMS. Secondly, that he has deliberately misled the council to take decisions in favour of those organisations and benefited financially in return,” the CMS said in the circular.

The report says no other CMS employees have been suspended.

Mmatli’s lawyer Hope Chaane said his client would oppose his suspension as Sipho Kabane, the acting registrar of the CMS, had failed to provide Mmatli with sufficient detail in his notice of intention to suspend his client to be able to defend himself and offer reasons as to why he should not be suspended.

 

The CMS suspended Mmatli “following tip-offs related to his conduct in the affairs of the regulator”, IoL reports the council announced. “A whistle-blower alleged that Mmatli deliberately misled the regulator of the medical schemes industry to take decisions in favour of certain organisations. He allegedly benefited financially in return. The seriousness of the allegations warranted his suspension as a precautionary measure to enable the regulator to conduct the investigation without any interference,” the CMS said.

“The Council for Medical Schemes is committed to conducting the regulatory affairs of the health sector with the highest degree of ethics, integrity, and compliance with corporate governance. Ethics and compliance with laws are vital to CMS’s success,” CMS acting registrar and CEO Dr Sipho Kabane said in the report. “Therefore, I have served Stephen Mmatli with a letter of precautionary suspension with full pay pending the outcome of investigations into serious acts of misconduct. As we intend to investigate these allegations, I believe a precautionary suspension is in the best interest for both parties,” Kabane said.

“I made this decision to reinforce our commitment to good corporate governance. Our code of ethics and conduct reflects this commitment and provides all employees with the policies that govern our sector and the tools necessary to make good decisions.”

The CMS’s mandate was always to “protect the interests of members, control, and coordinate the functioning of schemes in a manner that is complementary with national policies and investigate complaints and settle disputes in relation to the affairs of schemes as provided for by medical legislation and we will continue to uphold this mandate”, he is quoted in the report as saying.

Business Day report
IoL report


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