Medscheme has withdrawn its legal application against Bonitas Medical Fund, clearing the way for the Council for Medical Schemes (CMS) to carry out its forensic investigation into allegations of improper procurement and conflicts of interest, reports Daily Maverick.
The legal action followed Medscheme’s claims to have evidence of impropriety during tender processes involving the administration and managed care of Bonitas’ lower-cost BonCap option, as well as the scheme’s marketing and sales distribution contract.
According to its allegations, which have not been tested in court, contracts had been given to entities lacking the required experience, capacity and compliance credentials.
No finding of wrongdoing has been made against Bonitas, Private Health Administrators (PHA) or any other party.
Despite the application, Bonitas awarded its broader administration contract to Momentum Health and its managed-care contract to PHA, effective from 1 June.
Medscheme has accused Bonitas and PHA of using interlocutory applications and other delaying tactics to prevent the substance of its case from being heard before the handover, saying the evidence supporting its allegations remained unanswered and had not been challenged in court.
In an answering affidavit in January, Bonitas principal officer Lee Callakoppen said Medscheme had improperly linked two earlier tenders to the more recent contracts it was attempting to block.
He said the earlier processes concerned the 2022 award of BonCap administration and managed-care services to PHA and the 2024 appointment of Agile Business Solutions to handle marketing and sales distribution, and that the subsequent tenders related to administration services awarded to Momentum and managed-care services awarded to PHA from June 2026.
Callakoppen said there was no link between the earlier tenders under regulatory scrutiny and the new contracts Medscheme sought to interdict, and that the later tender processes had already been completed and binding contracts signed, making the requested interdict moot.
He accused Medscheme of acting to preserve its position as Bonitas’s service provider and the commercial benefits attached to the contracts.
Medscheme has denied its application was motivated by commercial self-interest.
Bonitas also disputed Medscheme’s claims about PHA’s capacity, with Callakoppen saying PHA had previously provided administration and managed-care services to other medical schemes, had been inspected and accredited by the CMS, and had its Bonitas administration agreement reviewed by the regulator. He said Medscheme continued to provide some services as PHA’s subcontractor after the BonCap contract was awarded.
His affidavit pointed out that Medscheme did not bid for either the BonCap tender or the marketing and distribution tender.
Callakoppen maintained that Medscheme and its parent company, AfroCentric, had initially supported the appointment of an alternative provider for the loss-making BonCap option. He said the marketing tender followed dissatisfaction with the performance of AfroCentric Distribution Services.
Bonitas denied that the appointment of Agile was tainted by a conflict of interest.
The regulatory process began after Business Day published an investigation in October 2024. The CMS registrar opened a Section 43 inquiry in February 2025 and requested information about the awards to PHA and Agile.
In November 2025, the CMS said its initial inquiry had found that the allegations warranted further investigation, and that it would initiate a forensic investigation to examine the claims and make recommendations. However, this did not indicate a predetermined outcome, the regulator stressed.
The CMS paused its process while the court action was under way.
Medscheme’s withdrawal means the interdict application will no longer determine the dispute. Bonitas’s rebuttal has also not been tested through a substantive court hearing.
The question now moves back to the regulator: whether the tender processes were properly managed and whether the evidence supports further action against any of the parties.
See more from MedicalBrief archives:
Medscheme launches urgent bid to pause Bonitas move
Watchdog deepens Bonitas investigation