Judge J Wright of the Local Division of the High Court, Johannesburg, has ordered that a provisional curator's report be provided to the Court for its consideration prior to the consideration of the scheme's liquidation application.
The legislature has placed mechanisms in place in order to ensure that the society at large is protected in instances where it would appear that a vast number of individuals would suffer harm should an institution collapse.
Examples of this can be found in the banking, insurance and medical aid sectors where legislation provides various mechanisms to ensure that these institutions remain solvent.
The media has recently reported that the medical aid scheme Health Squared has applied for voluntary liquidation in the Local Division of the High Court Johannesburg. The Council for Medical Schemes had previously identified various governance issues at the scheme.
The trustees of the scheme have applied for its voluntary liquidation, which application has been postponed by Judge J Wright pending the consideration of a report to be compiled by the provisional curator of the scheme, Santam Health CEO, Johannes Seoloane.
The scheme failed to convene an AGM to enable its members to vote on the decision to liquidate the scheme, exceeded a marketing budget included in a business plan approved by the Council of Medical Schemes and disagreed with the Registrar of Medical Schemes on a specific statutory manager to be appointed for the scheme.
It remains to be seen what the Courts further findings will be, but it appears apparent that in the event that he scheme is liquidated that the appointed liquidators would strongly consider instituting legal proceedings against the board of trustees of the scheme more specifically should the report by the provisional liquidator find that the board acted in a negligent manner or contrary to their fiduciary duties in insuring the solvency of the scheme.
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