Medswana fires executives for running parallel business

Brian Benza
Staff Writer | Wednesday September 8, 2010 00:00

 

Medswana is the country's largest distributor of pharmaceutical, surgical and related products to pharmacies, private doctors, dentists, clinics, hospitals and the Botswana Government.

Information reaching Mmegi says the two executives (names supplied but withheld for now) were fired late last month after they were discovered to have formed a private parallel import company for drug and pharmaceuticals in direct competition with their employer.

They were also accused of selling products from the parallel import company to Medswana at inflated prices of mark-ups of up to 30 percent.

Yesterday, Medswana's acting general manager, Piet Le Grange, confirmed the dismissal of the two executives and said investigations, which would ascertain the exact amount of money lost as a result of the alleged illicit transactions, were still on-going.

'We discovered that the two were running a parallel import company in direct competition with Medswana,' said Le Grange. 'They were bringing in their own lines of product with a 30 percent mark-up.'

Although Le Grange could not say exactly how much Medswana had lost in this manner, inside sources at the company say initial estimates place the figure at over P250 000.

Apart from the import company, the two executives are also accused of opening up a retail pharmacy where they sold products they purchased from Medswana at discounted prices. 'The two were also accused of unethical business practices after it was discovered that they were running a pharmacy which they stocked with supplies bought from Medswana at cheap prices,' Le Grange added.

In a letter dated 25 August 2010, Medswana chairman Fred Wypkema warns suppliers that the two are no longer a part of Medswana and that there is no relationship or partnership between Medswana and the private company formed by the two executives.

Formed in 1995, Medswana has large distribution network that evolved over time from a standard wholesale distribution model to the current system that has batch tracking capability. Medswana currently distributes products for all the major multinationals and distributes products for around 150 companies.

Two years ago, the company formed a buying group of pharmacies called the MedPharm Group, which has acted as another platform that suppliers can use to launch and distribute their products in the Botswana market.

This group currently consists of 45 of Botswana's biggest pharmacies.