Nine of Bestmed medical scheme’s trustees have been removed from office for alleged lack of fitness and propriety, the Council for Medical Schemes said on Thursday.
Their immediate removal followed a routine inspection by the council, spokesman Clayton Swart said in a statement.
The inspection uncovered a number of alleged transactions.
They included a trip to Botswana where Bestmed spent R365 201 on, among other activities, a safari and helicopter flights over the Victoria Falls, allegedly as part of marketing; hunting trips costing more than R60 000; Neil Diamond concert tickets, flights, liquor and entertainment for R140 793; rugby suit and ticket sponsorships of more than R205 000; and paying Sanlam Health Distribution Services (SHDS) marketing and distribution fees of over R111 million.
The council was empowered in terms of the Medical Schemes Act to remove a board of trustees member if they had sufficient reason to believe the person concerned was not fit and proper to hold office.
“The Botswana trip, hunting trips, paying for concerts, tickets and suits for rugby and sports events are not business of a medical scheme.”
The trustees had been given ample time and extensions to respond to the council’s concerns raised in a report handed to them in March 2013, Swart said.
“The council has found that the contravention of the rules and the relevant laws constitute sufficient reason to believe that the trustees are not fit and proper persons to hold the office as a trustee.”
Bestmed confirmed to the council it had paid more than R111 million to SHDS.
“Part of this payment was used to pay brokers and was received as co-administration in addition to fees for ensuring registration of new members,” Swart said.
“In terms of section 65(1) of the MSA no person may act as a broker or offer to act as a broker unless the council has granted accreditation to such a person on payment of such fees as may be prescribed.”
The trustees launched an urgent application in the High Court in Pretoria, in which they referred to an appeal to the council’s appeal board, to suspend the order.
“The council intends to oppose the application,” Swart said.
Bestmed is an open medical scheme with around 172 984 beneficiaries.
“The claims-paying ability of the scheme remains unaffected,” said Swart.
“The removal of trustees from office stems only from concerns over their ability to govern and is not a reflection of the financial stability of the scheme.”