Top South African healthcare provider, Netcare Group, has filed a High Court application to compel the government to settle a M686 million debt it says it is owed for operating the Queen ‘Mamohato Memorial Hospital (QMMH) on behalf of the state.
Netcare’s general manager Christoffel Smith filed the application on behalf of Netcare, the biggest company in the Tšepong Consortium which runs QMMH on behalf of the government.
Netcare has a 40 percent stake in the Tšepong Consortium. Four other companies, namely, Afri’nnai Health of South Africa, Excel Health, Women Investment and D10 Investments (all from Lesotho), hold the remaining shares.
QMMH is said to be facing serious financial challenges which Netcare has blamed on the government’s alleged failure to pay its debts to the consortium.
In his court papers, Netcare’s Mr Smith alleges that the consortium is owed M 686 million by the government which has refused to pay up over the years despite being repeatedly asked to do so.
He said the consortium is insolvent and cannot continue its operations without receiving payments from the government. The application has also exposed divisions among the members of the consortium with Mr Smith alleging that the Tšepong board of directors has inexplicably refused to sue the government for its failure to pay up.
“The plaintiff is not aware of any lawful reason entitling the first defendant to refuse to pay or to delay the payment of the indebtedness,” Mr Smith states on behalf of Netcare.
“Tšepong is insolvent and cannot continue with its business as usual without receiving payment of the indebtedness from the first defendant.
“The board of directors of Tšepong refuses without lawful reasons to institute a claim for payment of the indebtedness against the first defendant (Lesotho government), who has made infrequent and part payments on invoices but who has to date not raised any valid defence to the plaintiff’s demands for payment.
“No other shareholder/s nor any directors will institute a claim against the first defendant for payment of the indebtedness… It is in the interests of Tšepong that the commencement and continuance of these proceedings are not left to the directors or to the determination of the shareholders as a whole.”
Mr Smith alleges that the debts have accrued over the years due to the government’s failure to fully pay for clinical and operational services provided by the consortium at QMMH.
“Tšepong would provide the clinical and operational services to the first defendant…
“Tšepong would submit a Value Added Tax (VAT) invoice to the first defendant on a monthly basis which the first defendant would pay within 30 days by electronic payment into Tšepong’s bank account…
“Tšepong submitted the VAT invoices to the first defendant on a monthly basis. Payment of the invoices was due within 30 days thereof. The first defendant did not dispute the invoices. The first defendant failed to pay the invoices.
“In the circumstances, the first defendant is indebted to the Tšepong to the sum of M 686.073.373 together with default interest thereon. Despite demand, the first defendant fails, refuses and/or neglects to pay the indebtedness to Tšepong,” Mr Smith states in his application.