THE Directorate on Corruption and Economic Offences (DCEO) will investigate allegations of conflict of interest and money laundering by Netcare Hospital Group (Pty) Ltd — the majority shareholder in the Tšepong Consortium which operates the Queen Mamohato Memorial Hospital (QMMH) on behalf of the government.
This follows a complaint to the anti-corruption body by disgruntled junior shareholders who accuse Netcare of shortchanging them by failing to pay them dividends.
The junior shareholders — Excel Health, Afri’nnai Health, Women’s Investment and D10 Investments — allege that Tšepong Consortium has not paid them any dividends since the hospital opened its doors to patients in 2011.
The minority shareholders said Netcare had not paid dividends on the grounds that the consortium was not making enough profits. They however, allege that the company is making a killing as exemplified by its decision to pay itself about M200 million in management fees in 2018 alone.
Netcare, the South African based private hospital conglomerate controlled by Stellenbosch billionaire Johan Rupert, is the majority shareholder with 40 percent shares followed by Excel Health and Afri’nnai Health with 20 percent each while Women’s Investment Company and D10 Investments each hold a 10 percent stake.
The four allege that Netcare is unilaterally benefiting from the 18-year Public-Private Partnership (PPP) agreement the government signed with Tšepong Consortium in 2008 to manage the hospital.
The agreement was signed after Netcare was awarded the contract in December 2007 and formed the Tšepong Consortium with the four junior partners.
The Ministry of Health pays the consortium millions of maloti to manage Queen Mamohato, the biggest referral hospital in the country.
Last week three of the junior shareholders-Excel Health, Afri’nnai Health and D10 Investments- endorsed the 11 October 2019 Tšepong Consortium board resolutions to terminate Netcare’s contract to manage QMMH on behalf of the government.
They also endorsed resolutions demanding a forensic audit of the Tšepong Consortium and the laying of criminal charges against Netcare and Botle Facilities Management- a company contracted to maintain the QMMH facilities.
According to well-paced sources they followed up on this by visiting the DCEO offices last Wednesday to demand an investigation of Netcare.
“Some of the shareholders acting on behalf of all the minority shareholders visited the DCEO on Wednesday (16 October 2019) to ask the DCEO to investigate this Netcare.
“They want the DCEO to investigate possible conflict of interest involving Netcare and Botle. Apparently that company (Botle) is partly owned by Netcare,” the source said, adding that the DCEO has started investigations into the Tšepong issue.
DCEO spokesperson, ’Matlhokomelo Senoko, this week told the Lesotho Times that the anti-corruption body had received a report from the Tšepong officials but she would not be drawn into confirming whether or not they were investigating.
“Yes it is true that we have received such a report”, Ms Senoko said in a brief response on the issue.
The minority shareholders say Netcare has not paid them dividends on the grounds that the consortium was not making enough profits. They however, allege that the company is making a killing by paying itself about M200 million in management fees in 2018.
Confidential Tšepong Consortium financial statements recently seen by the Lesotho Times indicate that the government paid the consortium M597 777 890, 36 between February and September 2018.
But sources within the consortium allege that Netcare and Botle were the only ones who benefitted from the government payments. Netcare owns shares Botle Facilities Management. The sources said each time the government paid money into the consortium’s account, Netcare would transfer some of the money into its own account.
In total, Netcare was paid M201 399 701, 15 between January and September 2018 and this has angered the junior shareholders. Botle was paid a total of M28 355 111.