Source: PSMAS bosses squander millions on designer suits, slacks | The Sunday News 10 MARCH 2019
Robin Muchetu and Brian Chitemba, Sunday News Senior Reporters
PREMIER Service Medical Aid Society (PSMAS) is said to have splashed a jaw-dropping US$3 million on designer suits for top executives, fuel and curious information communication technology (ICT) upgrades at a time when its client’s medical insurance was being rejected by service providers.
The company is alleged to have spent more than US$75 000 on designer suits for company managers, including buying ladies’ fashion coats, casual shirts and slacks for two employees. The company also shelled out more than US$100 000 on fuel for board members, management and staff.
It is, however, the ICT upgrades that haemorrhaged the company the most. Documents show that on June 2 2017 then-managing director Engineer Tendai Kapumha signed for ICT upgrades worth $2,6 million (through PSMAS purchase number 22122), of which US$1,1 million was to be paid in advance.
A sum of US$2,4 million was also paid out to Frolgate Technology for supply and installation of new data cabling infrastructure, while US$2,7 million was used to buy other ICT consumables on November 22 2017. Further, the medical aid company was charged US$60 000 by Checkpoint Health for a mobile app and website development. The company also doled out US$30 425 for the construction and design of an exhibition stand at the Zimbabwe Agricultural show on August 17 2017.
PSMAS spokesman Mr Arthur Choga, however, defended the expenditures.
“As for the ICT system, we did not just wake up one day and said we were going to buy one. It is something which was discussed and planned over a five-year period. A lot of positive things happened between then and now. We have improved efficiency and mended relations with our stakeholders. We also cut our legacy debt by $17 million before the price madness,” he said.
Sunday News is also in possession of a document compiled by workers which details the alleged malpractices which border on gross abuse of office. The originators of the document have implored Government to investigate issues raised.
“We only bought 10 new ambulances to increase our old ailing fleet, yet we should have bought at least 40 ambulances. We now have ambulances that break down while carrying patients. In the mornings some ambulances are pushed, yet we are busy buying expensive cars. This shows lack of business acumen or a board that does not care at all.
“The company has disbursed over 250 luxurious cars. We are not in the transport business but surely this is pathetic to have such a huge fleet for a company yet pharmacies are empty, no reagents, it is pathetic yet management is concerned with luxurious lifestyles. In 2010 executive directors through their manager went on a spree to purchase old second hand vehicles from Japan wasting company resources. Most employees got cars as old as 10 to 15 years by 2010 yet the cars were first used in 1995 to 2000, but they went ahead and bought employees such old cars with high prices which could have bought newer cars,” reads the report.
It added that management went on to buy themselves new cars such as Prados, Toyota Land Cruisers, Jeep Grand Cherokees, Nissan Navaras, Fortuners and Mercedes Benz.
“In 2017 the company went on to buy brand new cars from their suppliers and the selection of suppliers was not flighted in the media.”
Meanwhile, the chairperson of the Parliamentary Portfolio Committee on Health Dr Ruth Labode is alleged to be a supplier of drugs to PSMAS members via Apple Pharmacy which is she is allegedly a shareholder. According to the document, Dr Labode is acting in conflict of interest.
“It is a conflict of interest for Apple Pharmacy to have a Service Level Agreement with PSMAS to sell drugs to PSMAS members as the owner is the chairperson of the Health Parliamentary Portfolio Committee. She cannot investigate corruption as she is also a service provider,” read the document.
Contacted for comment, Dr Labode said Apple Pharmacy was a family business and there was no conflict of interest as alleged.
“That is a family business which is run by Mr Labode my husband, I am not the only one who supplies drugs to those clients, we are contracted by PSMAS and there is nothing wrong with that. But if people feel like he should withdraw his services he can do it,” she said.
Mr Ayo Labode, a pharmacist said he was indeed supplying drugs and there was nothing wrong with that.
“I have been running that pharmacy since 2001 and I was the first one to service PSMAS, Dr Labode only went to Parliament in 2014 so how does that influence my running of the pharmacy? Again a doctor cannot run a pharmacy, only a pharmacist can,” he said.
The document further claims that unqualified people have been employed to management levels in the organisation yet there well deserving people that have been deprived of opportunities. The company is also alleged to have purchased obsolete X-ray and CT scanning machines purported to be new machines. A PSMAS board member who asked not be named said the company was addressing some of the issues raised.
COMMENTS
Vincent McMahon the CEO of WWE earns 6 million yearly from a company with a market value of over 6 billion. Cuthbert Dube and his cimas executives were earning just around there plus allowances. I wonder why the Zim govt does not put in place laws to fight this type of corruption despite millions been lost yearly and from govt parastatals.
Surely the journalist profession has gone to the dogs. This so called story is riddled with inaccuracies and unverified innuendos and half truths. I challenge this reporter to prove that 250 luxury vehicles were bought by this company. Yes some vehicles were bought under both the vehicle ownership scheme for medical practitioners and managerial staff as a way of retaining employees and the funding was a lease financing arrangement paid for by the respective employees and not the company and the number is way below 250. The other batch of vehicles again funded via lease agreement are the branded job need vehicles which were purchased and are used for transportation of samples, drugs, stocks, furniture, equipment and many other business requirements. This arrangement actually resulted in huge savings on transportation costs. It’s also important to understand that tender system is not compulsory for a privately owned business so to say the purchase of vehicles was never advertised displays the extent of ignorance by this reporter. It is perfectly acceptable for a company to apply its own internal supply chain policy in its procurements.
If you knew that this company employs nearly 2500 people and is found in all 10 provinces of the country with nearly 150 centres, and you were in touch with the reality of the costs of running a business in Zimbabwe you would know that there is nothing peculiar or out of the ordinary about the numbers you are fussing about in your article.
Did you carry out a skills and qualifications audit to confirm this gossip that you published as a story? Who in particular is not qualified for what they do at this company?
We must have missed the legislation that states that a private limited company must publish its purchases in the media. In the same vein we must have missed a myriad of articles on purchases done by other private companies in the country on their fleet purchases.
Reporters must report on facts not hearsay. This company is one of very few surviving entities in this country holding together a dilapidated health industry. Instead of applauding its agility and vigilance, journalists like you now want to create phantom corporate scandals out of nothing and sabotaging government efforts to restore confidence in local businesses.
Are you saying Ambulances are the only priority for this company? Has it occurred to you that the healthcare sector is reeling under a grave skills flight threat due to the trying economic environment and that there is a reason why these skills are being retained at PSMAS so that civil servants can continue to access services?
If there is indeed such rot at PSMAS, why go to the press and not to the law enforcement agencies to report on these alleged corporate crimes. Musatiitise ma reporter imi. Reporters need to stop perpetuating this misguided notion that PSMAS and its investment company are state owned enterprises because they are not. PSMAS is a member owned organization and its investment arm is a private limited company. You would think any journalist worth their salt would be clear about that especially if your story is going to be based on the premise of ownership structure and the requisite governance framework. 10 new Ambulances are more than an entire fleet at some of the local Ambulance businesses especially if you say they were purchased in a single year. That actually means that they are doing something about their “old ailing fleet” nemanetsero eforex aya.