Premier Service Holding Company liquidator Mr Godknows Hofisi has been tasked to investigate whether Premier Service Medical Aid Society and Premier Service Medical Investments owe any management fees to the group.
The investigation follows the High Court ruling ordering the liquidation of PSHC, whose operations became unsustainable after the Ministry of Health and Child Care, as the medical industry regulator, directed the company to cease collecting management fees derived from PSMAS medical aid subscribers in 2022.
The ministry also directed PSHC to stop interfering in the internal affairs of both PSMAS and PSMI.
As a result, PSHC’s business model became entirely untenable, leaving the company without a viable stream of income to fund its activities.
At the beginning of 2025, the company attempted to enter voluntary liquidation under Section 9 of the Insolvency Act.
This provision allowed shareholders to pass a liquidation resolution, which was approved by creditors.
However, creditors, who are primarily employees, including many who were transferred from PSMAS and PSMI, voted against the resolution.
These creditors opposed the liquidation process, arguing that the company must first resolve the dispute over management fees.
They believe that if the fees, which were halted in 2022, are recovered, the company will have the funds to settle its outstanding claims.
However, PSMAS argues that the management fees must not be paid because no services were rendered to justify such payments after the Government ordered the cessation of those fees in 2022.
“In accordance with the court order, I have been mandated to determine if there are outstanding management fees owed to the company. Our goal is to recover these funds to pay the creditors, who consist largely of the company’s employees,” said Mr Hofisi.
Mr Hofisi must also navigate the complexities of a circular corporate structure.
Although PSHC functioned as the holding company for the group, receiving management feeds, it has since emerged that the company is in fact a wholly owned subsidiary of PSMAS.
Similarly, PSMAS maintains 100 percent ownership of PSMI.
The arrangement was formally challenged on August 28, 2024, when PSMAS passed a resolution during a special meeting to reverse the establishment of PSHC.
Given these deep-seated financial and structural issues, many observers believe the liquidation of PSHC was a necessary and long-overdue step.
According to the court application filed by Mawere Sibanda Commercial Lawyers, which led to a liquidation order, PSHC’s legal representatives, the liquidation was initiated under Section 5(1)(a) of the Insolvency Act.
The specific provision allows a company to seek liquidation if it has passed a formal resolution to be wound up by the court, provided there are no legal or contractual barriers preventing such a decision.
Mr Hofisi said the placement of PSHC under liquidation would not affect the operations of PSMAS and PSMI.-herald
