Members want to vote out Cimas directors


OVER 100 Cimas Medical Aid Society members want to oust seven directors from the board including chief executive officer (CEO) McDonald Chaora at today’s annual general meeting (AGM) of members.


The aggrieved members, led by Harare businessman Chester Mhende, want the ouster of board members Timothy Johnston, board chairperson Mordecai Mahlangu, Matts Valela and Luke Ngwerume for their association with Old Mutual. Ngwerume is a former CEO of Old Mutual while the remaining trio sits on the Old Mutual board, its subsidiaries or associate companies.

“These cross relationships result in the over representation of the Old Mutual group on the board of the society which is not representative of the broad membership of the society,” Mhende said.

Mhende said Emma Fundira and Bart Mswaka were introduced to the board as appointees of the sitting board members, the majority of whom were from the Old Mutual stable. At their first AGM in 2013, the trio was not subjected to election by members as required by the constitution and Mhende said their continued stay on the board was suspect.

The aggrieved members want Chaora removed on the grounds that the financials proposed for adoption at today’s meeting do not “make some necessary disclosures, including the amount of money spent on free medical cover and treatment by board members and employees”. They said there was no justification for expenditure amounting to $15 million on information communication technology.

Yesterday, Chaora said the meeting would stick to issues that were on the agenda.

He said any other business would be discussed if the chairperson decided to do so.

Items on the agenda include confirmation of minutes of last year’s AGM, adoption of annual report and audited financial statements for the year ended December 31 2014 and approval of the payment of board members fees. The AGM is expected to elect one board member as Ngwerume retires by rotation and offers himself for re-election. The meeting is supposed to appoint auditors for the ensuing year.

In its financial results for the year ended December 31 2014, Cimas said viability challenges being faced by firms and loss of long standing membership has resulted in its membership being static in 2014.

In a statement accompanying the group’s results, Mahlangu said the negative impact on the medical industry was unavoidable as company closures had become commonplace and the traditional market of the society was being threatened.

“Medical aid membership growth has been only 1% to 203 481 members compared to 201 504 members last year. Our membership seems static, largely because we have lost some long standing individuals and firms who can no longer afford to pay their contributions as they face viability challenges,” he said.

The group posted a surplus for the year of $4,3 million compared to $5,5 million in the prior year due to significant write downs in respect of non-performing contribution receivables as certain members firms has not serviced their accounts for lengthy periods. During the period under review non-medical activities contributed 68% to the surplus.

Mahlangu said during the period under review, claims cost increased and had placed the society on invidious position that it faced in the past six years.

“Our claims cost have increased at a time when there was a marginal increase in membership in 2014 and a decline since January 2015,” he said.

“We have identified two disturbing trends, firstly the costs in some health disciplines have spiralled out of control and secondly some membership categories are showing unsustainable claims loss ratios that are threatening our business model.”