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Sizwe Medical Fund, an open medical scheme with some 156 000 beneficiaries, was placed under provisional curatorship this week by the North Gauteng High Court.
According to the curatorship application brought by Registrar of Medical Schemes Dr Monwabisi Gantsho, practices at Sizwe have been a cause of concern since 2010.
The registrar appointed an inspector to investigate the scheme’s affairs in May 2010. Gantsho’s concerns were:
* The scheme was running an unregistered benefit option;
* The way in which the scheme’s trustees had been elected;
* The fitness and propriety of the scheme’s officers;
* The appointment and remuneration of brokers; and
* The scheme’s failure to pay prescribed minimum benefit claims in full as required by law.
It also came to light that Sizwe was being run by its then principal officer, Linda Gabela, rather than its trustees.
Based on the inspector’s report, Gantsho applied to the North Gauteng High Court in December 2010 to have Sizwe placed under curatorship. The scheme opposed the curatorship.
Before the matter could be finalised in August last year, evidence of fraud in the election of two trustees, Lucille Teegler and Samuel Marcus, was brought to the registrar’s attention.
Gantsho asked the trustees to do something about the alleged fraud, but only in May this year, 16 months after they became aware of the issue, did the trustees do anything about removing Teegler and Marcus.
In October last year, Gantsho appointed an inspector to look into the alleged election fraud, as well as to investigate any irregularities in the conduct of Gabela, who had been suspended and later resigned from the scheme. The inspector was also tasked with looking into:
* Whether the board of trustees was functioning;
* Sizwe’s declining solvency ratio;
* Whether there were irregularities in the scheme’s use of Ubuhle Bezwe Health Services and the procurement of new offices; and
* Whether healthcare brokers were owed any fees.
The findings of the inspector’s report, the failure of the trustees to ensure that the board was constituted as provided for in the scheme’s rules and the fact that the acting principal officer was not properly qualified to manage Sizwe’s affairs, prompted the registrar to approach the High Court again for a curatorship order.
The matter was brought as an urgent one, and Sizwe was not afforded an opportunity to state its side of the case.
This week the High Court granted the provisional curatorship order and appointed Dr Marshall Ngubekhaya Gobinca as curator.
The return date for the order is October 9, when Sizwe will have an opportunity to oppose the curatorship order being made final.
Despite its governance problems, Sizwe Medical Fund is financially strong and has reserves equal to 27 percent of its contribution income, which is above the 25 percent required by law.