The owners of the controversial health care company Mediosa, a Gupta-linked company dubiously awarded contracts in the North West and Free State, have left South Africa leaving behind more than 100 employees unpaid.
The company, which – according to the department of health in the North West – was paid R30 million in May last year before it started doing any actual work, is now citing “financial crunch” as an explanation to the delay in salary payments.
The contract, awarded without tender, was for the services of a high-tech mobile clinic unit. There are two such units in the North West and two in the Free State, where the company first scored its plush contract about two years ago.
Mediosa employees in the Free State and in the North West, including officials in the latter province, have confirmed that no salaries were paid to the contracted workers.
There are about 60 workers in the Free State and around the same number in the North West.
City Press has seen a letter signed by Mediosa co-owner, Sundeep Kalsi, pleading with employees to bear with them while they try to sort out their payments.
“We are facing a financial crunch as the provincial government owes the company for the services provided since November 2017 and we have received a communication from [the] department for the payment to be made in April 2018,” Kalsi wrote.
The North West health department recently wrote to service providers crying the same and informed them that their payments would be made once the new budget had been loaded, that was after April 1 when the 2018/19 financial year kicked in.
Mediosa was in the news recently due to its contract, especially in the North West, where it paid for departmental officials to go on a trip to India to see its operations. This was after the two parties had already signed a contract a month earlier, according to the department. It emerged that the contract was not awarded in an open tender bidding process.
The company also blamed the media for its financial woes.
“Due to the current media outburst, we are unable to get [a] loan locally hence we have transferred funds from India which will reach South Africa by March 6. Therefore, the salary will not go out today [February 28] as anticipated. All salaries will go out on March 7,” the letter said.
Workers complained about debit orders that did not go through and that it was going to result in penalties for them. They were also worried that the company owners might not return to South Africa as both of them – Kalsi and Inish Merchant – were Indian citizens.
Kalsi tried to explain their situation in the letter saying that “Mediosa is a family and we are aware there might be certain difficulties brought about by this delay. Senior management would like to apologize for the delay in your salary payment. We are sorry for the inconveniences and undue financial burden this might have caused you.”
Not everyone, however, was buying this. “We have waited for Merchant to come explain to us if our company is indeed linked to the Guptas and on February 16, we were informed that he has gone to India only to address employees via Skype assuring them Mediosa was not Gupta-linked at all. How do we trust them when the Guptas themselves were running away from the police,” one Mediosa employee from Qwa Qwa said.
Another employee said that it made sense to some extent that their employer was Gupta-linked given “we were, until two months ago or so, getting our salaries from the Bank of Baroda” which has been hugely associated with the Guptas.
City Press called Mediosa’s offices, situated in the plush Melrose Arch, but a man on the other side explained that both Kalsi and Merchant were out of South Africa. The man who would not identify himself said employees’ salaries would be paid soon.
City Press could not immediately verify with Free State and North West provinces if indeed they owed Mediosa any money.
*The story will be updated as it develops.