SOUTH Africa's fourth-largest medical scheme, Medshield, has been placed under provisional curatorship because trustees have been accused of misappropriating money and "acting as a law unto themselves".
The Council for Medical Schemes (CMS), regulator of medical aids, has however assured Medshield members that their medical claims will still be paid.
CMS registrar Dr Monwabisi Gantsho said: "The provisional curatorship has nothing to do with the financial soundness of the scheme."
The council told the Pretoria High Court on Tuesday that if the scheme was not placed under curatorship, there was a danger of the scheme's trust funds being misappropriated in future.
Gantsho said trustees had initiated contracts worth millions without following proper processes or justifying the contracts.
He said the trustees had paid themselves "excessive remuneration" and paid themselves twice for each responsibility.
Gantsho alleged the trustees illegally paid themselves retainers and then remunerated themselves for each annual launch and meeting attended even though it was never approved.
A trustee, on part time, earned an average of R280000 a year.
The chief executive of the scheme, Thabo Mabeta, also acted as a trustee, which was illegal as chief executives were meant to independently approve trustees' decisions.
Mabeta paid himself R150000 a month as a volunteer trustee and then a chief executive salary of about R100000 a month.
Some of the money was also allegedly paid into a family trust linked to Mabeta.
Gantsho said: "The remuneration was paid to Mabeta despite it having been pointed out that it was illegal.
"There is no evidence that Mabeta fulfilled any role of CEO in addition to what he was doing as trustee and chairperson," he said.
The scheme also appointed Inkwazi to collect money from the Road Accident Fund while Mabeta was a part owner of Inkwazi.
He later sold his rights, but CMS alleges that the trustees and Mabeta should not have appointed a company linked to one of its members.
CMS wants Medshield to recover more than R600000 from Mabeta.
They also want R27-million they allege was paid illegally to brokers to create business for the medical aid.
The court papers detail how Medshield refused to allow auditors Ernst and Young onto the premises and would not hand over minutes of meetings or provide them with full accounting records.
The scheme also refused to cooperate with a compliance inspection appointed by the CMS.
Medshield could not be reached for comment.