Former trustee ordered to repay R1.7m
Fin24

Former trustee ordered to repay R1.7m

2013-05-30 11:00

Pretoria - The North Gauteng High Court in Pretoria has ordered a former trustee of Liberty Medical Scheme (Liberty) to pay back the R1.7m he received from the scheme in terms of an illegal settlement agreement.

It saw him prematurely resigning from the scheme’s board and agreeing not to assist any regulatory or other authority with any possible investigation into the scheme.

Advocate Boyce Mkhize and Liberty agreed to “a special arrangement” in May 2011, in terms of which Mkhize received R962 500 for resigning from the board of the scheme one month before his term of office would have automatically come to an end.

He also received a further R700 000 as a restraint of trade agreement for agreeing not to assist anyone with any possible action against the scheme.

The court set the settlement agreement aside, calling it illegal, the board “supine” and Mkhize “blissfully unaware” of his fiduciary responsibilities as a trustee.

The judgment ordered Mkhize to return the R1.7m to the scheme and to cover the legal costs of all parties to this matter out of his own pocket, estimated to amount to an additional hundreds of thousands of rand.

“This is another big victory for the regulator as the custodian of the principles of good governance in the medical schemes industry,” said Dr Monwabisi Gantsho, chief executive of the council for medical schemes and registrar of medical schemes.

Comments
  • Tim Norris - 2013-05-30 11:56

    Well who initiated and authorized such a deal. They should be charged as well as Liberty being fined

  • Izz Thatso - 2013-05-30 13:05

    If an advocate doesn't understand his fiduciary duties, do the many other less qualified trustees of medical schemes know what they're doing? No wonder this industry is such a mess.

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