Creecy dissolves board of Road Accident Fund amid governance failure
She has also asked the Special Investigating Unit (SIU) to request an expansion of the scope of its current investigation to cover the events of the last three months.
The RAF is insolvent, with liabilities exceeding its assets. It also has chronic governance problems, which resulted in the suspension of its CEO, Collins Letsoalo, last month. In addition to the SIU investigation, it faces a probe by Parliament's Standing Committee on Public Accounts (Scopa).
Several whistleblowers have made disclosures about corruption at the fund.
Creecy said that among the reasons for the board's dissolution was its 'reckless' handling of Letsoalo's suspension, which has attracted a legal challenge and caused institutional uncertainty.
Other reasons included:
The RAF's protracted and costly litigation against the Auditor-General on the application of accounting standards.
The occurrence of frequent default judgments against it.
Deep divisions within the board, which reflect a lack of cohesion in critical decision-making processes.
The board's failure to fill at least two executive positions, critical to the mandate of the fund, namely the chief claims officer and head of legal.
Creecy said these factors had 'resulted in the loss of confidence in the board's ability to run the entity effectively'.
In a statement issued on Tuesday, Creecy said that more than a month ago, she had allowed the board to make representations to her on why they should not be suspended. She had also asked the National Treasury to appoint an interim accounting authority while recruiting a new board.
Creecy has also established an expert advisory committee to review the RAF's business processes and make recommendations. The panel's members will be announced in due course. She reiterated her department's intent to reintroduce a new version of the Road Accident Benefit Scheme (RABS) Bill, which failed to pass in the fifth Parliament under suspicious circumstances and amid heavy lobbying from the legal fraternity.
'The bill will introduce a no-fault system to make it easier for road accident victims to access benefits without costly legal bills,' said the statement.
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