Duduza Khosana
Duduza Khosana

A high court judge has removed the provisional curator of medical scheme Samwumed, who he found was incurring "exorbitant" but "unproductive" expenses that were not helping to solve the scheme’s problems.

Judge AJ Engers found "good cause" to remove Duduza Khosana, who was earning R234,000 a month and has incurred expenses of at least R100,000 since her appointment at the 80,000-member Samwumed in May.

The judge said that Khosana was making "radical changes" at the scheme rather than serving her primary purpose, which was to fix the scheme’s dysfunctional board of trustees that resulted from faction fighting within the SA Municipal Workers Union (Samwu).

"I find it disturbing that she has seen fit to make what are possibly far-reaching decisions without having addressed the main problems she was supposed to," Engers said in his judgment, which was handed down on Tuesday.

In August, Andre Maxwell, the scheme’s former deputy chair, argued in his urgent application to remove Khosana that her decisions to restructure the scheme’s benefits, cancel key contracts and suspend senior management were causing it irreparable harm.

In September, Dr Sipho Kabane, the acting registrar of the Medical Schemes Council, who asked the court to appoint Khosana in the first place, lodged his own application asking for her to be removed. Kabane said he had lost trust in her as she had failed to plan steps to tackle the scheme’s problems.

But the judge had harsh words for Kabane, pointing out that his office had taken 18 months to deal with the problems at the scheme and was "high-handed" with Khosana, informing her both of his concerns and his intention to remove her in July.

Engers appointed Joe Seoloane as the new provisional curator in line with Kabane’s recommendation. He ruled against Kabane’s request that Khosana cover his costs, ordering both parties to pay their own costs. Engers also ordered Kabane and Khosana to cover Maxwell’s legal costs.

Engers also criticised the acting registrar for not alerting the court that appointed Khosana to the fact that her employment as principal officer with Medshield had been terminated in 2012. He said the registrar “must surely have been aware of the facts surrounding the Medshield curatorship”.

Medshield was placed under curatorship that year after an investigation revealed the scheme had entered into a broker management agreement that had no value to the scheme.

He says Khosana had responded to allegations surround her time at Medshield stating “blandly” that she was no longer employed by that scheme. “This in no way allays my disquiet,” the judge said, adding that this in itself could constitute good reason to remove the provisional curator.

The judge said it was not necessary for him to decide on whether Khosana was right to suspend senior managers at the scheme, including the scheme’s long-standing principal officer Neil Nair. But he said the provisional curator did appear to “have gone on something of a witch hunt to uncover past irregularities” and the state of hostility between her and staff of the scheme was “highly toxic” for the scheme and its members.

Engers said Khosana had cancelled the scheme’s contracts with Melomed and Alexander Forbes without consulting personnel of the scheme whose expertise in running the scheme for many years would have been crucial.

He said her salary of R234,000 did “at first sight appear excessive” and questioned why the acting registrar had not found a Cape Town-based curator so as to avoid travel and accommodation costs that Khosana had incurred.