A Cape Town radiology firm is facing allegations of “fronting” after an investigation launched by the Broad-Based BEE (B-BBEE) Commission, and the firm’s black partner accusing the company of merely using him to pretend it has black-ownership and control.
Thapelo Motshudi partnered with into Bergman Ross & Partners (BRP) in 2015 to pursue an opportunity to provide radiology services at Netcare’s Pinehaven facility, the collaboration forming Motshudi Bergman Ross Radiologists – and scooping a five-year contract to provide services to Netcare.
Business Day reports that Motshudi had brought the opportunity to BRP as he did not have the funding to launch the venture.
He said the agreement between him and BRP was that he would own a 50% stake in the venture, with the other 50% held by BRP, but to his surprise, three years into the partnership he learnt that BRP claimed to hold a 74% stake in the practice, with him owning the rest.
The partners have been at loggerheads since then, with the matter before the courts, the commission and the Health Professions Council of SA (HPCSA).
The complaint laid with the HPCSA by Motshudi refers to the regulations that a company cannot own more than 24% of a medical practice.
In his complaint to the HPSCA, Motshudi said: “BRP has surreptitiously, and without my consent, arrogated to itself 74% of equity…thus reneging on a verbal agreement that we will each own 50% of the incorporated company.
“It has become evident that even the equal shareholding we had originally envisaged, let alone the undeserved 74% they claim, is in transgression of regulation 706 of the Health Professions Act, which states that a company cannot own more than 24% of a medical practice.”
Motshudi’s case is backed by Jacky Rampedi who co-owns the licence in Netcare Pinehaven Hospital. He said he was the one who alerted Motshudi on the radiology lease contract and encouraged him to bid for it.
“When it became clear to me that he was not going to succeed with sourcing funding, we discussed him bringing in a partner who could assist him with meeting the requirement to provide Netcare with the compulsory financial guarantees,” Rampedi said in a letter before court.
“It was in that context that he approached BRP, and I later met representatives of the company when they came with him to present their joint proposal. It was never envisaged, or even discussed, that Dr Motshudi would be a junior partner in this venture.
“On the contrary, I would not have supported the joint proposal if I had been aware that Dr Motshudi was not going to be, at the very least, an equal if not a majority partner, given the transformation agenda that drove my support for him.”
BRP acknowledged the investigation against it by the commission and the HPCSA and the legal challenge to the shareholding of Motshudi Bergman Ross Radiologists
“BRP regrets Dr Motshudi’s dissatisfaction but rejects his portrayal of our actions. This three-year-old matter, now before the courts, HPCSA and BBBEE Commission, will be resolved with full transparency,” it said.
“BRP has engaged legal counsel to defend our position and trusts the process to reveal the truth.
“We welcome scrutiny from the HPCSA and the courts, confident that a fair review will affirm our integrity. We are confident these allegations will be dismissed. Our working operations remain unaffected by this matter.”
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