Parliamentarians across the political divide yesterday described as illegal and unconstitutional attempts by Government to protect Premier Medical Aid Society’s property from attachment over its debts that stand at approximately $90 million.
Government’s move to protect PSMAS was issued in Statutory Instrument 77 of 2015 section 2 of the Presidential Powers (Temporary Measures) Act as read with the State Liabilities Act in July.
Parliamentary Legal Committee’s chairman Cde Jonathan Samukange said the Statutory Instrument was illegal as PSMAS was not a State entity.
“The Statutory Instrument is ultra vires the State Liabilities Act in that it seeks to apply provisions of the Act to the PSMAS, which is not a State controlled entity,” he said. “The preamble to the State Liabilities Act states that it is an ‘Act to impose liabilities upon the State in respect to acts of its employees’,” he said.
Cde Samukange said PSMAS was a private company controlled by a board of directors.
“PSMAS isn’t an institution that can be described as a parastatal or State owned,” he said. “PSMAS is an organisation driven by subscribers. Furthermore, liability upon the State must be as a result of the acts of its employees of which the employees of PSMAS are not part of the civil service.”
Zanu-PF Bikita West representative Dr Munyaradzi Kereke said the Statutory Instrument would set a wrong precedent.
“Let us not set bad debtors precedence because if this is going to go through, a private person who is shackled by bank debts may also apply for the same protection,” he said.
“Let us not cover for institutional profligacy. The reason why PSMAS is so much indebted is mismanagement and misalignment of priorities.”
MDC-T Harare West representative Jessie Majome said the State Liabilities Act was not created to cover private organisations.
“The State Liabilities Act was not created for private voluntary organisations. We as lawmakers should not be seen to be passing an illegality, we will lose respect of the public,” she said.
“We should not be seen to be using the law to protect them from paying what they owe to small enterprises because that would be tantamount to signing a death warrant for them.”
MDC’s Matabeleland South proportional representative Ms Priscilla Misihairabwi-Mushonga said the Statutory Instrument would reward poor corporate governance.
“This is an issue of rewarding bad behaviour,” she said.
Zanu-PF Buhera South representative Cde Joseph Chinotimba urged Government to prosecute previous managers accused of receiving obscene salaries at the institution.
“Why should we pay when we know of people like Cuthbert Dube (former PSMAS group chief executive officer) and his management team that looted the organisation?” he asked.
“This is a private organisation, so those people who looted the funds should repay or have their properties sold to recover the money they abused.”
Debate on the issue is expected to continue on Tuesday next week.
The Statutory Instrument was passed after PSMAS had suffered a string of lawsuits from service provides who wanted to attach its property.
In turn, management at PSMAS argues that the non-remittance of subscriptions by Government which provides the majority of the society’s members is the main reason behind late payment of the service providers.