Samwumed to be back in control of trustees tied to troubled union

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The medical schemes regulator is backing the curator of Samwumed as he prepares to put the scheme back in control of elected trustees by the end of August, reports Business Day. This is despite the fact that a number of trustees of the scheme will be appointed by the union for municipal workers, the South African Municipal Workers’ Union (Samwu), which is facing even bigger problems than those that led to the scheme being put under curatorship in the first place.

Joe Seloane, curator of Samwumed, and Sipho Kabane, registrar of medical schemes, are quoted in the report as saying that the scheme is financially and operationally sound and will be ready for trustee elections by the end of August. This is despite the union reportedly facing an application by the labour registrar asking the Labour Court to put the union under administration for failure to comply with financial accounting laws.

Mfana Maswanganyi, a senior investigator at the council, said the council is monitoring developments at the union and if the union is put under administration, its curator will appoint the scheme’s union-member trustees.

Seloane said in the report with member approval he will apply for an amendment to the schemes rules to reduce the 19-member board of trustees to 12, including five union-appointed trustees, five member-elected trustees, one independent trustee and one pensioner representative.

The report said Kabane dismissed claims by the former chair of the scheme, André Maxwell, made in a letter to the council, that the council’s now-suspended general manager for compliance and investigations, Stephen Mmatli, misled the regulator about issues at the scheme saying that Mmatli compromised the lives of the scheme’s 80,000 members and dependants by wasting money on frivolous investigations and curatorship. Maxwell accused Mmatli of orchestrating a vendetta against the scheme because it opposed the regulator’s interpretation of regulations about the payment of claims for prescribed minimum benefits.

Kabane said that Mmatli was suspended on the basis of a tip-off from a whistleblower to the Special Investigating Unit (SIU). Samwumed did not feature in that tip-off. He said Maxwell’s letter had been sent to the SIU and he encouraged Maxwell to contact the SIU.

The report said Duduza Khosana was appointed as provisional curator of the scheme in May 2018 when the court found the scheme’s board of trustees was in disarray owing to fighting over the leadership of the union and the appointment of the union trustees.
Two court applications to remove her as curator followed. In one application, by Maxwell and other former trustees, it was argued that she was wasting the scheme’s resources, and in the other, by Kabane, it was argued she was not doing the job she was appointed to do. The Western Cape High Court removed her and appointed Seloane in October 2018.

Seloane said five senior employees of the scheme whom Khosana had suspended, resigned voluntarily after negotiating a separation agreement with the new curator. The report says he has no plans yet to take any further action against any officials of the scheme. However, the curator said he is reviewing the scheme’s ownership of properties in Mitchells Plain and Retreat in Cape Town and is fighting a contractor’s claim for renovations to its Athlone headquarters.

The report says the clinic on the scheme’s Mitchell’s Plain property closed in 2016, but the scheme has yet to dispose of it and is still paying for rates and security-related expenses for it. The Retreat property was purchased many years ago for a second clinic, but has not been developed. Seloane said he has obtained market valuations for the properties and will decide what to do with them in the best interests of the scheme’s members.

The report said renovations to the Athlone property ran well over the R16m budget to R22m and the payment of about R400,000 for an additional contract for R1.2m relating to renovations in 2018 is being contested in court. The building has been overcapitalised and its value on the scheme’s financial statements has been reduced by about R6m to R38m, he said.

Seloane said the scheme’s designated service provider contracts have been reviewed and remain in place, but one is the subject of a complaint to the Competition Commission.

Business Day report

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