Bankmed chairman Charles Wells quit the medical aid in November 2015 following the launch of a misconduct probe by industry regulator, the Council for Medical Schemes (CMS).
The scheme’s 2015 annual report makes a brief reference to Wells’s resignation, which came months after his re-election, but neglects to cite details.
Bankmed’s CEO and principal officer Teddy Mosomothane declined to answer the Financial Mail’s questions about governance deficiencies or Wells’s exit, and neither issue was dealt with at its AGM in June.
He did say, however, that Bankmed had an AA+ rating from Global Credit Ratings.
The CMS probe cites "misconduct, procurement irregularities and conflicts of interests". Dr Elsabé Conradie of CMS confirmed the existence of a probe, but wouldn’t provide details, since "the parties involved may still want to pursue legal action against the scheme".
The banking industry fund collects a combined R4bn in premiums a year. With a membership base of more than 200,000, Bankmed ranks seventh out of SA’s 83 schemes.
The CMS probe began after whistleblowers alerted it to alleged foul play. It found Wells had spent R53,500 of members’ funds to buy luxury pens which were given as gifts.
The CMS "advised" Bankmed — now under the chairmanship of Wells’s former deputy, Danny Armstrong — to "recover the value of the pens from the recipients".
Mosomothane declines to indicate how much the scheme had recovered. He also wouldn’t say if the board knew of Wells’s actions beforehand.
The probe has also uncovered alleged nepotism, citing an entity wholly owned by Wells’s wife which allegedly was paid with members’ funds for managing its centenary jamboree events. The scheme and the CMS will not name the beneficiary nor specify the amounts involved.
The medical aid has upset some members for what they see as a drop-off in service standards after it swapped administrators in January. It opted to switch to Discovery Health after dumping Metropolitan.
Mosomothane links members’ "frustration" to teething problems. He says the switch was inspired by his top brass’s view that the administrator is a "one-stop shop" that offers "efficiencies [and] economies of scale". He was unable to elaborate on the specific economic benefits of the switch.
The deficit for its comprehensive plan has ballooned, raising questions about its sustainability. The high-end benefit option crashed from a R25m surplus in 2013 to a R123m deficit a year later, and this worsened in 2015.
The length of service by trustees also seemed to be a bugbear. But at the 2015 AGM — the last one he chaired — Wells said that since Bankmed was not a JSE-listed firm it was not subject to the prescripts of the King codes on corporate governance.