South Africa’s medical scheme regulator has escalated its fight to keep Sizwe Hosmed under curatorship. An affidavit filed in the High Court in Pretoria alleges serious governance and payment failures at the troubled scheme. The allegations include potential duplicate claims exceeding R522m, stale claims worth R81m, procurement concerns, and alleged misuse of a corporate credit card.
The affidavit was filed by Council for Medical Schemes (CMS) registrar Musa Gumede. It responds to a court application brought by Sizwe Hosmed’s former board of trustees. The former board wants the court to remove the curator, Lebogang Mpakati, and to rescind the curatorship.
Sizwe Hosmed is the country’s eighth-largest open medical scheme. It was placed under curatorship last year after attempts to stabilise it through statutory management failed. Under statutory management, a board remains in place. Under curatorship, the board is removed.
Sizwe Hosmed Curatorship Standoff Heads to Court
Gumede opposes ending the curatorship. He argues that the scheme still requires intervention and tighter oversight. He also relies on findings from two forensic reports that the regulator has not previously published.
At the same time, Gumede agrees that Mpakati should not continue as curator. A provisional sequestration order was granted against her late last year. Gumede has now launched a counterapplication asking the court to remove her and appoint Ian Fleming instead. Fleming previously served as curator of Thebemed Medical Scheme.
Gumede says Mpakati did not disclose that she was involved in legal proceedings linked to the liquidation of her business and the sequestration of her estate when she was appointed. He also points to details in the judgment granting provisional orders, including an alleged overpayment of fees, which he says raises concerns about fitness to hold office. Mpakati has said publicly that the matter is separate and does not affect her role.
Forensic Reports Flag Duplicate Claims and Stale Payouts
According to Gumede’s court papers, a TFS Africa Forensics report identified potential duplicate claims of more than R522m. These are instances in which providers may have been paid multiple times for the same claim.
The report also flagged more than 245,000 “stale” claims, totalling R81m, paid between July 2023 and February 2024. Claims are considered stale after four months. Many schemes treat them as ineligible thereafter.
Sizwe Hosmed’s administrator, 3Sixty Health, disputes the allegations. CEO Khandani Msibi said 3Sixty has not seen the TFS report. He said the claim that duplicate payouts exceed half a billion rand is unfounded. He also referenced an earlier KPMG report that initially alleged over R300m in duplicate claims, but which he says was later reduced to R17m. Msibi accused the registrar of conducting a “fishing expedition” and questioned why the scheme and the administrator have not been allowed to respond to the findings.
Sizwe Hosmed Curatorship Claims Include Credit Card Misuse
A second report, by Phandahanu Forensics, alleges that former principal officer Simon Mangcwatywa misused the scheme’s corporate credit card. The alleged expenses include car rentals during leave, flights for relatives, and traffic fines.
Mangcwatywa denied wrongdoing. He said he provided detailed records and receipts for alleged expenses totalling R1.1m during an internal investigation. He said the spending aligned with the scheme’s policies at the time, and that all charges against him were withdrawn in 2024.
The same report also alleges irregularities linked to the appointment of a company for scheme elections, and payments to service providers without supporting contracts.
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