In a highly charged submission to the Council of Medical Schemes (CMS) dated 2 January, Khandani Msibi, executive chairperson of 3Sixty Global Solutions Group, has levelled explosive allegations against medical scheme regulators and industry players.
Msibi claims a deliberate campaign targeted one of the last remaining black-owned administrators in South Africa’s multibillion-rand medical aid industry for dismantlement.
The 14‑page letter accuses regulatory authorities, union leaders and industry figures of orchestrating what he describes as regulatory capture and targeted sabotage against Sizwe Hosmed medical scheme. Furthermore, Msibi paints a picture of collusion, corruption and a calculated effort to undermine the scheme’s financial stability in pursuit of strategic gain.
Sizwe Hosmed Regulatory Allegations: Claims Of Conspiracy And Intentional Harm
Central to the allegations is the controversial curatorship of Sizwe Hosmed. Msibi alleges that statutory manager Joe Seloane worked in tandem with Irvin Jim, general secretary of the National Union of Metalworkers of South Africa (Numsa). Together, they allegedly engineered circumstances that would force a merger favourable to the KeyHealth medical scheme.
Msibi asserts that Seloane has business interests tied to KeyHealth, suggesting a conflict of interest at the heart of the unfolding crisis.
Msibi’s letter traces Sizwe Hosmed’s roots back to 1978, when black doctors and business leaders established it during apartheid to provide medical aid to previously excluded black South Africans. The scheme has strong historical ties to the National Union of Mineworkers and, later, to Numsa members. Given the involvement of union leadership in its alleged undoing, Msibi describes the scheme’s present predicament as a bitter irony.
Allegations Of Manufactured Financial Distress And Regulatory Bias
What makes the Sizwe Hosmed regulatory allegations particularly explosive is Msibi’s claim that the scheme’s financial distress was untrue. He accuses Seloane of deliberately collapsing benefit options for former Hosmed members. Consequently, this prompted a mass migration from the scheme and a sharp decline in solvency ratios. In his view, this was no accident but a strategy to manufacture a narrative of imminent collapse.
More seriously, Msibi alleges that officials ordered actuaries to overstate Sizwe Hosmed’s liabilities to create a false sense of a financial crisis. He points to an investigation by audit firm KPMG into supposed duplicate claims worth R380 million.
The firm reportedly identified just R17 million over three years - a fraction of claims paid and far below industry fraud benchmarks of 15%–20%. Yet, Msibi claims this outcome was weaponised against 3Sixty and Sizwe Hosmed.
Msibi goes further, accusing regulatory authorities of systemic bias against black‑owned enterprises in the medical scheme sector. He argues that although regulators are predominantly black, the industry they oversee remains “lily‑white and untransformed” at ownership and executive levels. In his view, this situation reflects entrenched regulatory capture working against meaningful transformation.
Curatorship Appointment And Impact On Service Providers
The appointment of curator Lebogang Mpakati is another focus of Msibi’s ire. He questions why someone with no industry experience was chosen to manage an allegedly distressed scheme. Msibi points out that the CMS typically insists on sector expertise for board appointments.
Msibi alleges Mpakati has acted as a “henchman” for Seloane and Jim, leading to a halt in payments to healthcare providers. These providers, in turn, ceased services to scheme members. As a result, this precipitated a wave of terminations among Sizwe Hosmed’s core mining and industrial base.
To compound his concerns, Msibi highlights a CMS circular directing members of the SA Local Government Association to move from Sizwe Hosmed to KeyHealth. This is the very scheme he alleges was the intended beneficiary of the unfolding events. Additionally, he views this as further evidence of coordinated action against his company.
Broader Implications For Transformation And Regulatory Credibility
Perhaps the most damaging claim in Msibi’s letter is that despite three curatorships in a decade and multiple investigations, Sizwe Hosmed continues to operate. Many members who left the scheme have reportedly ended up paying more for inferior benefits. Moreover, Msibi argues this situation undermines the regulator’s narrative of financial collapse and questions the justification for the extreme regulatory intervention.
In closing, Msibi demands Mpakati’s immediate removal. He warns that if the CMS destroys Sizwe Hosmed, it will earn the “dubious honour” of destroying a black business - a critique that directly challenges South Africa’s transformation agenda.
In response, CMS chairperson Musa Gumede dismissed Msibi’s claims. Furthermore, Gumede noted that the parties aired these issues in court when the CMS applied for curatorship, but Msibi chose not to participate in that process. He labelled his current comments as “innuendo without any basis”.
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