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Selfmed duo face inquiry over 'failed governance'

The husband and wife team at the helm of Selfmed Medical Scheme have been suspended and are to face a disciplinary inquiry, following an interim out-of-court agreement reached by the Council for Medical Schemes and the Selfmed scheme.

The development follows a long-running investigation by the council into alleged governance failings at Selfmed, which has about 16 900 members. Court papers show that concerns centred on the appointment of Leon Bester as scheme CEO, along with an acting principal officer. This was allegedly in breach of the Medical Schemes Act under which only a principal officer should be appointed to carry out the executive functions required of a scheme.

There were also alleged irregularities with his contract, along with remuneration and bonuses. Also of concern was the appointment of Bester's wife, Martha, from a junior marketing position at Absa to marketing director at Selfmed with a six-fold increase in salary, as well as the scheme's board of trustees agreeing to pay the couple R725 000 in 2009 for relocating from Johannesburg to Cape Town, where Selfmed is based. The out-of-court settlement was reached after the council applied to place the scheme under curatorship in March, a move which Selfmed opposed. The agreement appoints Brian Kleinsmith as acting principal officer.

The council's head of compliance, Stephen Mmatli, said the acting principal officer must continue with further investigation, because the CMS had little cooperation from the scheme until a whistle-blower informed it there were documents hidden offsite. Despite its alleged governance failings, Selfmed was financially stable and had a solvency ratio of 115 percent, the council said. Mmatli said the council was concerned at the apparent failure of big auditing firms to report financial irregularities they found in medical schemes.

Tamar Kahn: Business Day, 9 May 2013