The trustees of Samwumed, a medical scheme for unionised municipal workers, are contesting the curatorship order on the scheme, while some of its members have raised concerns over the provisional curator’s suspension of four senior employees. Business Day reports that this follows the cancellation of key contracts that are being investigated by the Council for Medical Schemes.
However, Duduza Khosana, provisional curator of Cape Town-headquartered Samwumed, which covers more than 80,000 lives, said in the report that she had uncovered irregularities that she could not disclose to the media. She said that she had reported these to the council and would also report them to the Western Cape High Court, which had appointed her at the beginning of May. The matter was due to return to court at the end of last month, but has now been postponed to 26 October, Dr Sipho Kabane, the acting registrar of medical schemes and CEO of the council confirmed.
The report says the allegations are that Khosana, based in Gauteng, is paying herself R240,000 a month and incurring expenses of R200,000 a month – such as flights, accommodation and car hire – for a hefty R5.3m bill a year to the scheme, which has a history of always fighting to protect members from the high costs of private health care. Khosana, who was the principal officer of Medshield before that scheme was put under curatorship in 2013, denies she is earning this amount but would not disclose what she was earning.
The report says Khosana suspended Samwumed’s principal officer, Neil Nair, who has been with the scheme since its inception in 2001, on full pay. Also suspended is corporate services manager Loedt Zemanay, operations manager Quinton Rosen, and sales and marketing manager Adele Hanson. The four lodged a case of unfair suspension with the Commission for Conciliation, Mediation and Arbitration (CCMA). Mediation has failed and the four were planning to apply for arbitration, Nair said.
Khosana says their suspension is not “a pronouncement on their guilt or otherwise”, but gives the scheme an opportunity to look into allegations. She is quoted in the report as saying she will defend the CCMA case on the basis that it is premature because investigations have not yet been concluded.
Sources say that two senior human resources managers employed by Samwumed have also resigned and have been asked to leave before serving notice. The e-mail from concerned members alleges that Khosana has hired expensive governance and forensic experts and is on a shopping spree with the cash-flush scheme. Samwumed collects contributions of more than R1bn a year and had R1bn in reserves at the end of 2016.
Khosana says she contracted Independent Governance Services to investigate governance and compliance issues, and that the company has already concluded its work. She also appointed an information technology and a forensic company to check the scheme’s IT system and investigate numerous information leaks. The e-mail claims the curator has terminated scheme contracts, including one with its investment consultant, Alexander Forbes, and alleges she has close ties with another asset manager.
According to the report, Khosana says the contract was problematic as it was signed by Nair after she was appointed. She denies she has any financial interest in any asset manager or consultant. She has cancelled and reported other contracts, she says, including one for construction and maintenance services, which did not offer the scheme value for money, to the council.
Thirteen former Samwumed trustees including the former chair Sanny Ndlovu, and deputy chair Andrew Maxwell, have lodged papers in the Western Cape High Court contesting the curatorship application on the grounds that no material irregularities exist warranting the provisional order.
The Council for Medical Schemes applied for the appointment of curator this year as conflict in the South African Municipal Workers Union had, it argued, rendered the board of trustees dysfunctional. The report says the scheme’s rules provide for nine trustees appointed by the union’s central executive committee, but two factions which arose in the union in 2016 sent conflicting instructions to the scheme on the recall and replacement of these trustees.
The leadership of the municipal workers’ union has since been determined by a Labour Court judgment that was confirmed on appeal in May.Business Day report