Jaspreet Kindra
Two senior officials from a primary health-care group funded by the government pension fund have been arrested in connection with the theft of R50-million. The money was destined for setting up clinics in formerly disadvantaged areas.
The officials are Ernustus Visser and Vaughan Coetzee, executive directors of the Carewell Group, which is backed by the Public Investment Commissioners (PIC).
An off-shoot of the PIC, the Isibaya Fund, pumped about R70-million into Carewell when it was established as Lesiba Healthcare Holdings (Pty) Limited in 1998. The PIC handles the state pension fund.
The Pretoria High Court last month heard testimony alleging that Visser and Coetzee used the stolen company money to set up companies, buy properties and even pay company tax.
According to court documents, Visser was appointed Carewell’s financial director and authorised to be a signatory on the company’s cheques.
His signature had to be accompanied by that of one of two other signatories – Coetzee and the company’s then managing director, Thabo Lehlokoe.
In their testimony, Lehlokoe, Carewell’s acting managing director Lwazi Koyana and Sipho Sono of audit firm Nkonki Sizwe Ntsaluba explained how Visser and Coetzee siphoned money from the company. The two errant executives allegedly signed off Carewell cheques to other companies in which they had interests.
Through a company called Carewell Properties Holding Company (Pty) Limited, Visser and Coetzee allegedly purchased a R1,55-million property in Pretoria in May 1998, without the knowledge and consent of the Carewell Group’s board of directors.
This was allegedly followed by the purchase of yet another property for R550E000 – and four months after the Pretoria purchase, a pub, The Keg and Putter, on KwaZulu-Natal’s South Coast, with R600E000 of the company’s funds.
During 1998, Visser drew cheques amounting to R176E190 in favour of Paramount Home Developers, one of the respondents named in the case. This company owns the Pretoria home in which Visser lives.
Visser and Coetzee drew cheques amounting to more than R2-million – allegedly from the Carewell funds – last year to pay the taxes of another unrelated company.
Court documents alleged that Visser and Coetzee, in their capacities as directors of Carewell, spent R17-million on a 25% stake in a company called Solit SA (Pty) Limited, which purported to be a computer company specialising in medical software.
Visser and Coetzee also allegedly gave a multimillion-rand software contract to the company in which they had an undisclosed interest.
According to Koyana’s testimony, Visser and Coetzee did not disclose to Carewell their interest in Solit, to which they awarded R5,5-million in software contracts for Carewell clinics. The company also turned out to have no track record in the medical field.
“At a time when the Carewell Group South Africa had only established 17 such clinics, Visser and Coetzee purchased licences on behalf of CGSA from Solit South Africa (Pty) Limited at R100E000 each for 55 clinics. CGSA still only has 17 clinics and has therefore suffered financial prejudice as a result of the conduct of Visser and Coetzee,” Koyana said.
Visser and Coetzee left the company and resigned as directors in August 1999. According to Sipho Ngwema, representative for the National Director of Public Prosecutions, Bulelani Ngcuka, the assets forfeiture unit got wind of the alleged theft in February and started investigations. Following a successful restraining order application at the court on March 9, R50-million worth of assets belonging to the two individuals were attached.
The court was presented with two forensic audits mapping out the alleged frauds.
The Isibaya Fund appointed Ernst & Young to investigate, while Carewell recruited another audit firm, BDO Spencer, to conduct another investigation. Coetzee and Visser are out on R300E000 bail each.
The case resumes in September.