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Tšepong shareholders back board over Netcare

Pascalinah Kabi

JUNIOR shareholders in the Tšepong Consortium have endorsed the recent Tšepong board resolutions to terminate majority shareholder, Netcare Hospital Group (Pty) Ltd’s contract to manage Queen ‘Mamohato Memorial Hospital (QMMH) on behalf of the government.

They are also in full agreement with other 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.

The three companies which endorsed the 11 October 2019 Tšepong special board meeting in Maseru are Excel Health, Afri’nnai Health and D10 Investments.

They however, said their endorsement of the board resolutions should not be taken to mean that there was infighting within the consortium. They argue that there are only differences of opinion among board members which are normal in any organisation.

The Tšepong Consortium comprises of five companies, namely the majority shareholder, Netcare (40 percent shareholding), Excel Health and Afri’nnai Health (20 percent each) and Women’s Investment Company and D10 Investments (10 percent each). The consortium was awarded the contract to operate QMMH on behalf of government.

Minority shareholders recently alleged that the consortium has not paid them any dividends since the hospital opened its doors to patients in 2011.

The minority shareholders said Netcare has not paid 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.

The Ministry of Health pays the consortium millions of maloti to manage QMMH, the biggest referral hospital in the country.

Confidential Tšepong Consortium financial statements recently seen by the Sunday Express’ sister Lesotho Times publication indicate that the government paid the consortium M597 777 890, 36 between February and September 2018.

The money paid by the government to Tšepong in the 2018/19 financial year could be more as the financial statement seen by this publication does not cover the period after September 2018.

But sources within the consortium allege that Netcare and Botle were the only ones who benefitted from the government payments. 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.

And on 11 October 2019, the junior shareholders resolved to terminate Netcare and Botle’s contracts.

The special board meeting also resolved to order a forensic audit of the consortium and to lay criminal charges against Netcare and Botle.

Netcare, who vehemently opposed the resolutions, abstained from voting at the meeting.

According to a confidential email addressed to Tšepong shareholders by Netcare General Manager of Finance, Chris Smith, Netcare resolved to abstain from voting on the proposal because they were “unsighted as to the reasoning behind this proposal (to order a forensic audit of the consortium)”.

The email was written to the shareholders on Thursday 10 October 2019, a day before the special board meeting.

Should the resolution be implemented then the consortium will lose its majority shareholder. But the sources said the majority shareholders are unfazed by the prospect of going it alone without the consortium’s biggest shareholder, saying the QMMH, the country’s biggest referral hospital, can still go on as it has its complement of doctors and other staff who can still be paid by the government.

Excel Health, Afri’nnai Health and D10 Investments recently released a statement endorsing the resolutions of the 11 October 2019 special board meeting.

Surprisingly they dismissed reports of infighting in the consortium as “baseless, assertions” that were sponsored by an unnamed “individual determined to divert attention from the mismanagement of funds by the management company (Netcare)”.

“Shareholders of the Tšepong consortium, Excel Health, Afri’nnai Health and D10 Investments, have learnt with dismay recent media reports alleging infighting within the conglomerate. The shareholders, therefore, wish to repudiate these baseless assertions and put it on record that these reports are untrue and misleading.

“There has never been a clash to be construed in this manner in any of our previous meetings…All the decisions of the board over the forensic audit of the company; the termination of the management contract of Netcare Hospital and on all matters related thereto, we as shareholders, want to declare our full support and guarantee that we will continue to take a similar position for as long as the main objective is to protect our investments and to expose corruption.

“It is important to mention that it is common cause across the world for board members to hold opposing opinions during meetings, and that does not translate into hostility towards individual board members. It is, therefore, misplaced for any member who has lost a vote to allege that shareholders are up in arms – that is an outright distortion of facts and standard practices enshrined by the principle of collective responsibility,” ‘Mota Nkuatsana, of Afri’nnai Health, said in a statement on behalf the three companies.

 

He also said the dissemination of false information would lead to the collapse of Tšepong with negative consequences for health delivery in Lesotho.

 

“What we conclude is that the public and government are being deceived into believing that Tšepong is experiencing serious problems that might lead to its collapse. These actions are a deliberate deceptive move by an individual determined to divert attention from the mismanagement of funds by the management company,” Mr Nkuatsana said.

 

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