Medical schemes chief probed

Cape Town - The Council for Medical Schemes (CMS) is investigating allegations of irregularities against its former acting registrar, Patrick Matshidze, and former trustees of the Community Medical Aid Scheme (Commed).

Last year the previous Commed board of trustees had asked Matshidze to investigate the medical scheme because of alleged problems related to corporate governance.

CMS inspectors investigated Commed between June and September, but were unable to uncover any irregularities.

The CMS was however suspicious about a contract for R14.5m awarded in 2006 to a company called Brandnue. The full amount had been paid before the contract had come into operation, the CMS said in a statement.

The current Commed trustees appointed a private forensic investigator to look into the payment and it was established that Matshidze was a business partner of Langa Mconi, the Commed chief executive at the time, and Jimson Motshoane, the deputy chair of the fund's board of trustees.

Mconi and Motshoane had been involved in the awarding of the R14.5m contract.

Matshidze had never disclosed his relationship with the two senior Commed employees, either during his term as acting registrar or during the investigation into Commed.

The investigator also found that the Brandnue contract had been irregular.

No proper tender process had been followed and the contract was worth little to the fund.

The fund had apparently been used for an unregistered entity called Commed Mozambique.

It appeared that Mconi, Motshoane and Matshidze had been directly or indirectly involved in the establishment of Commed Mozambique.

Most of the contract amount had been inappropriately spent and precious little for the real benefit of Commed as specified in the Brandnue contact, said the statement.