Tamar Kahn
SIZWE Medical Fund was placed under provisional curatorship this week after it emerged that its principal officer, who was managing R2-billion, had not finished school, there were alleged financial irregularities in the scheme and fraud in the election of trustees.
The North Gauteng High Court granted the Council for Medical Schemes an order for curatorship of the scheme, one of the country's largest and most healthy financially.
Council registrar Dr Monwabisi Gantsho yesterday reassured members that the scheme could pay claims. "There are no concerns whatsoever over the financial position of the scheme," he said.
Sizwe has 156000 beneficiaries. It had a solvency ratio of 27% at the end of last year. The Medical Schemes Act requires 25%.
The council, a statutory body responsible for safeguarding the interests of medical scheme members, had for years been concerned about the way Sizwe has been managed.
The council first tried to get the scheme placed under curatorship two years ago when trustees did not assist in an inspection it ordered, but backed off after receiving an undertaking of cooperation.
On Wednesday, the court appointed Marshall Gobinca as Sizwe's provisional curator, authorising him to manage the scheme for a year while he investigates allegations of financial and governance irregularities.
According to Gantsho's affidavit to the court, the scheme's trustees failed to act after they were made aware in January that fraud had been committed in the December 2010 trustee elections.
"There is clearly no effective management at the scheme and no desire to comply with the provisions of the scheme's rules concerning its board of trustees," he said. By law a board of trustees must have 10 members, but Sizwe had six.
The council's head of compliance, Stephen Mmatli, said a second inspection of the scheme had uncovered a host of financial irregularities.
Sizwe's principal officer, Mel Pohler, was alleged to have a financial interest in a brokerage that did business with the scheme, Mmatli said.
The inspection also found R13-million of the scheme's funds had been placed in a risky employee benefit and funeral cover group with little prospect of recovering the money, he said.
This breached the rules that governed the kind of investment medical schemes may make.
Gantsho said Pohler, appointed in May, did not have the qualifications and experience to manage an income of R2-billion a year and reserves of more than R450-million or "to act as the head, face and hands of a medical scheme which has the health of more than 150000 persons at stake, and grant it strategic leadership. Her previous, relevant employment experience is essentially payroll and administration benefits administration," he said.
Pohler declined to comment.
Sizwe will have an opportunity to respond on October 9.
