Polmed lost R11.2m in 'illegal building deal' - claim
The Star has seen minutes from an April 2018 Polmed staff meeting where employees were informed that the Council for Medical Schemes (CMS) had directed the police’s medical fund to sell its Tshwane headquarters as its purchase had contravened sections of the Medical Schemes Act.
This followed a R70m loan Polmed gave its subsidiary, Polmed Propriety Investment (PPI), for the R50m purchase of Polmed House in 2010, where after the property’s revalue was at R58.8m in 2016.
“However, one challenge the scheme faced was that a loan amount of R70m was extended to PPI in order to buy the property and the difference between the loan amount and the current value of the property (R58.8m) will result in a loss (R112m) for the scheme,” the minutes read.
On Monday, The Star reported that Polmed, which covers almost 680 000 members and beneficiaries, had allegedly “illegally” awarded roughly R15.7m to its board members over three years in contravention of its own rules, which state that board payments should be approved at the annual general meeting.
Polmed principal Neo Khauoe denied anything illegal had happened with the payments, adding all remuneration had been approved by the CMS.
Polmed, according to its 2018 financials, lost over R140m from the previous year because of “the increasing claims ratio”.
Section 35(8) (a) of the Medical Schemes Act states that a fund “shall not invest its assets in the business of or grant loans to an employer who participates in the medical scheme or any administrator or any arrangement associated with the medical scheme”.
The CMS, which was sent questions on Thursday morning and promised to answer, did not do so.
The SA Police Union (Sapu) said it had been trying to receive information about what it felt was the illegal purchase of Polmed House.
“Sapu interdicted the 2016 Polmed annual general meeting to obtain information regarding the directive and especially the action taken regarding the building, which according to the directives, had to be sold as this was illegally acquired using funds that belong to Polmed members,” the union contended.
Khauoe said: “It is interesting that you refer to the purchase of Polmed House as unlawful. We do not know why it is ‘unlawful’ as you allege. All medical schemes are allowed to purchase property in South Africa, and in our case the Polmed rules authorised the scheme to purchase property. There is accordingly nothing unlawful about the purchase.”
She did not answer whether members had been informed of the projected loss from the building.@khayakoko88