RAF CEO Collins Letsoalo on special leave after 'interference by executives and staff' into multi-million Rand probes
Image: Sapa
Collins Letsoalo, the CEO of Road Accident Fund (RAF), has been placed on special leave as a precautionary step to facilitate the ongoing investigation by the SIU into a controversial R79 million lease deal for the RAF's office in Johannesburg.
Transport Deputy Minister Mkhuleko Hlengwa said the decision was taken by the RAF board during a meeting on Tuesday.
Hlengwa revealed the latest development during a Standing Committee on Public Accounts meeting on Thursday, where the RAF was expected to give an update on the investigation conducted by the Special Investigating Unit (SIU).
This follows allegations of possible interference by executives and staff in the investigation process.
Letsoalo, whose term expires in August, will still receive his salary and other benefits.
The SIU is currently investigating the RAF for alleged corruption and maladministration.
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Letsoalo has been implicated in several allegations of financial mismanagement and corruption, primarily centered around a controversial R79 million lease deal for the RAF's office in Johannesburg.
The SIU preliminary report alleges that Letsoalo interfered with the procurement processes by overturning the bid committee's decision to favor property management company Mowana Properties, which ultimately secured the contract.
The allegations were extended beyond the lease to include irregularities in other RAF contracts such as a R19m cleaning and security contract that was irregularly extended over six years, as well as R313m backlog project that was unlawfully awarded with inflated costs.
Hlengwa said that the decision was taken solely in the interest of good governance.
He said this was a precautionary measure and did not constitute disciplinary action.
He said the board exercised its fiduciary duties in terms of the Road Accident Fund Act, 56 of 1996, the Public Finance Management Act, 1 of 1999, and in alignment with the principles of good governance as set out in King IV.
Hlengwa added that the decisions did not imply any prejudgement or adverse finding against Letsoalo.
'The special leave arrangement will remain in place until the conclusion of the relevant investigations by the SIU, or such earlier date as the board may determine. The board will review the situation on a monthly basis and communicate the updates,' said Hlongwa.
He said that during this period, Phathutshdzu Lukhwareni will serve as acting CEO to ensure operational continuity.
Hlengwa added that, as the shareholder, the Department of Transport Ministry supports the decision that the RAF board has taken and believes it was in the collective interests of the investigation, particularly as it is in the final stages.
Scopa is in possession of the SIU's preliminary report.
He said the Transport Ministry has not been briefed by the SIU on matters related to the investigation.
'We do not have the opportunity to engage the SIU either and therefore we do not have the benefits of the committee's perspective on matters related to the investigation, said Hlengwa.
However, he admitted that the department was aware of the investigation but remained clueless about the outcomes.
He said the department also expects the RAF to cooperate with the investigation until it reaches its logical conclusion and then receive the recommendations and outcomes of that investigation.
'However, I do believe that the board would have applied its mind in the matters before it and before this committee and the matters before the SIU to arrive at the decisions that they have arrived at,' he said.
Meanwhile, the RAF board chairperson, Zanele Francois, said there were serious allegations, including possible interference by executives and staff in the investigation.
She said this is the reason the board believes Letsoalo must be placed on special leave.
'The board is taking this very seriously, which is why we believe Mr Letsoalo must be distanced from the process while it runs its course,' she said.
'We felt it was necessary to give him time off to address personal conflicts related to this process, to reflect on his role, and to ensure the organisation is not brought into disrepute. The board also needs to show its support for parliamentary oversight structures,' she said, adding that the board was in communication with the SIU and would meet the unit in June as part of the ongoing investigation.
The story will be updated when the RAF responds.
manyane.manyane@inl.co.za
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