Firm applies for rescue

MEDIOSA is bankrupt and cannot honour its financial obligations, including paying salaries.

As a result, the Gupta-linked company – which Health Minister Dr Aaron Motsoaledi likened to an ATM milking the state dry – is in limbo after losing trading capital and has applied for business rescue.

The bankruptcy comes as Mediosa’s lucrative contract with the North West and Free State provincial departments of health hang in the balance.

Mediosa spokeswoman Michelle Barnes confirmed that the company could not pay the workers.

“Mediosa is owed substantial amounts in outstanding payments due by Free State and North West health departments,” she said.

But Mediosa staffers have said how they could not offer primary healthcare services to patients in the two provinces, despite the company being paid.

The North West paid Mediosa R30million, which provincial health spokesman Tebogo Lekgethwane said a meeting between the company directors and the health bosses would determine if the controversial company should pay back or not.

“What was supposed to happen was for the two parties to meet once the agreed amount of work was done to assess the work done and ascertain if they owe the department or the department owes.

“That meeting has not yet happened because for some time the owners of the company were said to be out of the country,” he said.

Free State department of health spokesman Mondli Mvambi echoed Motsoaledi’s words.

“If their company can’t pay salaries after a glitch in a contract with one client, then the minister was right by calling them an ATM card.”

“It is irresponsible business practice of them to wait for a client to pay them in order to pay their staff, ” said Mvambi.

In a follow-up statement to the Dispatch, Mvambi admitted that the Free State department of health owes Mediosa R8-million for services rendered.

He said the money would be paid in the current financial year.

“This arrangement of payments of service providers in the new financial year is a standard arrangement that we often do with our service providers without necessarily flouting the commitment to adherence of paying service providers within 30 days,” he said.

Mediosa lawyer Asif Latib, hired by the company to facilitate the business rescue, said the company has no financial resources as a result of the lack of payment from the government.

Latib said his clients were now in limbo waiting for the provincial health departments to pay them an outstanding R17-million. —