A multimillion-rand contract between Medscheme and the Road Accident Fund (RAF) is at the centre of an investigation after a whistle-blower alleged close personal ties between officials of both entities.
At the end of 2013, when the RAF faced a growing backlog of claims, the board decided to partially outsource the administration and settlement of some of the outstanding claims, which gave birth to Project Siyenza.
The project, which came to an end last year, was controversial from the start, with many critics asking why millions were being spent on outsourcing work when the fund should have had the capacity to do the work itself.
Only two service providers qualified for the tender — Medscheme and a consortium consisting of EY and A2A Kopano.
Now a whistle-blower’s complaint to the fund last year has brought to light that there was possibly a problem with how Medscheme was awarded its part of a contract that has seen the company pocketing more than R130-million for completing less than 50% of the cases it was given.
According to the whistle-blower, the RAF’s head of the legal division at the time, Charlene Louw, sat on the tender adjudicating boards. The whistle-blower states that Louw is married to Tim Rametse, who is the managing director of AfroCentric Health Solutions, which wholly owns Medscheme.
“Louw did not declare the relationship. She was appointed to the position before Medscheme was selected to supply the services. She worked on the committee that recommended them and she also had documents that were used to consider the bid,” the whistle-blower states.
Neither Louw nor Rametse answered calls and messages seeking comment.
Kabelo Letebele, the spokesperson for AfroCentric Health, confirmed that Medscheme had been awarded the contract but claimed everything was above board because Louw had allegedly been appointed at the RAF after the medical company had submitted its tender bid documents.
“The company has a strict declaration of interest policy that applies to all employees, including directors. Prior to the submission of any tender bid, all Medscheme employees are requested to indicate if they have any potential personal or business interest which would need to be mentioned in the submission.
“Should further information arise that indicate any breach of our declaration of interest policy, we will look into the matter and take appropriate action,” he said.
The fund has been investigating the matter for months but has not reached a finding. According to a report, which the Mail & Guardian has seen, compiled by the internal forensic department, the Louw probe was made a priority. But insiders claim Louw is being protected by the fund, and say this is why the investigation is taking so long.
Linda Rulashe, the fund’s spokesperson, confirmed that an internal investigation is under way.
“However, we are not at liberty to provide any further details, other than to state that this investigation was initiated by the RAF several months ago and is being managed in accordance with the fund’s strict policies and procedures.”
Rulashe said the process underwent several checks and balances. The tender was scrutinised and verified through procurement, audit and board committees, before being signed off by the board.
“It is therefore highly unlikely that any one individual could have influenced this process,” she said.
But Rulashe did not say whether Louw had declared any relationship with members of Medscheme or its parent body.
The whistle-blower also said the matter had been reported to the former RAF chief executive, Eugene Watson, before he left last year and nothing was done.
A brief search into Watson links him to André Meyer, the former chief executive officer of Medscheme, who left the company a month after the contract was awarded.
Meyer and Watson opened up at least five companies together three months after Watson left the RAF.
Meyer could not be reached for comment but Watson denied having known about the whistle-blower’s report.
“If you are asking me when I know André Meyer from, I know him from long before the RAF. I think he worked at Alexander Forbes and I worked for the government employees’ medical scheme. We were acquaintances like any other professionals in healthcare.”
He said he did not adjudicate any tender that the RAF awarded to Medscheme while Meyer was there. He added that they had both left formal employment and decided to open companies together.
“I served my term at RAF and there is nothing peculiar about us opening companies together.”