Netcare denies BEE-fronting al­le­ga­tions

The Star Early Edition - - NEWS - KHANYISILE NG­COBO AND KHAYA KOKO khanyisile.ng­cobo@inl.co.za khaya.koko@inl.co.za

MED­I­CAL gi­ant Netcare has de­nied al­le­ga­tions of BEE fronting lev­elled against it by Mi­la­gros So­cial De­vel­op­ment.

Netcare came un­der fire after Mi­la­gros laid a com­plaint with the BEE Com­mis­sion against the Mother and Child Trust (MCT) – a com­pany reg­is­tered by Netcare in 2005 as part of its BEE scheme, Health Part­ners for Life (HPFL) – ac­cus­ing them of breach of con­tract.

Netcare con­firmed that a com­plaint had been laid, but denies it was in­volved in BEE fronting.

“Netcare con­firms that Mi­la­gros have laid a com­plaint with the BEE Com­mis­sion, and a meet­ing is sched­uled to be held be­tween rep­re­sen­ta­tives of MCT and the com­mis­sion on Wed­nes­day, June 28,” said group hu­man re­sources di­rec­tor Peter War­rener.

He added: “Netcare dis­agrees with the con­tents of the al­le­ga­tions in the com­plaint to the com­mis­sion, but con­firms that the com­pany and the trustees of the MCT are com­mit­ted to re­solv­ing the mat­ter.”

War­rener also con­firmed that MCT rep­re­sen­ta­tives would meet with the Dis­abled Peo­ple South Africa’s In­vest­ment Hold­ings on Fri­day in re­sponse to a re­quest from Mi­la­gros for a meet­ing.

Mi­la­gros’s share­hold­ers are all black women. The com­pany was se­lected as the an­chor ben­e­fi­ciary of MCT, one of four BEE trusts reg­is­tered un­der the HPFL trans­ac­tion.

Mi­la­gros said MCT broke the con­di­tions of the trans­ac­tion by re­fus­ing to pay it the three vest­ings – or the rights that ben­e­fi­cia­ries have to the in­come or as­sets of a trust – in the months of Novem­ber in 2014, 2015 and 2016.

This was after Mi­la­gros was awarded 2 mil­lion trust units linked to a cor­re­spond­ing num­ber of Netcare shares at R12.76 a share, with a loan of more than R25 mil­lion pro­vided by the med­i­cal gi­ant, in which the shares were locked from 2008 to 2012.

There­after, 20% of the shares could be dis­posed of through a sale – the ben­e­fi­cia­ries could choose to sell or trans­fer the shares to their per­sonal bro­kers – the net pro­ceeds of which would be paid out to the ben­e­fi­ciary after a de­duc­tion of in­ter­est, among other de­duc­tions.

Mi­la­gros said they re­ceived the vest­ing for 2012 and 2013, but not for the next three years, which is why they al­lege fronting.

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