Latest news with #CollinsLetsoalo
Daily Maverick
16-07-2025
- Business
- Daily Maverick
The Road Accident Fund is due for a robust clean-up
The recent suspension of Road Accident Fund (RAF) CEO, Collins Letsoalo, followed by Minister Barbara Creecy's decision to dissolve the RAF board this week, is a welcome move and a long overdue signal that serious intervention is finally under way at this embattled institution. While the RAF's rot certainly worsened under Letsoalo's leadership since 2019, its dysfunction long predates his tenure. The decline began as far back as 2008/09, not coincidentally, the same period when State Capture began to take root under former President Jacob Zuma. The RAF has since become a textbook case of how cadre deployment, poor governance and weak financial oversight give rise to the collapse of a state institution, which in turn leads to widespread failure to deliver on its mandate to the people and massive increases in costs to society. Consider this: in 2005/06, the RAF received just more than R5.5-billion in fuel levy income (then 37 cents a litre), ran a manageable claims book and even produced a surplus of R1.4-billion – thanks in part to a once-off Treasury grant of R2.5-billion. It was, at the time, still largely functional and able to fulfil its mandate, and a 5c increase in the RAF levy would have negated the Treasury bailout. However, within three years, by 2008/09, the RAF's operating expenses had ballooned more than 350% to R24-billion. To cover this growing shortfall, the fuel levy was pushed up to 47c per litre, which was a 27% increase in just three years that significantly outpaced inflation. The rot had taken hold, and opportunistic law firms and other specialist advisory services began feasting on the RAF's inability to manage claims effectively, many settling on courthouse steps at enormous cost to the fund. From 2009 onwards, this chaos spiralled. By 2020, operating expenses had doubled again to nearly R49-billion. However, this figure masked a growing backlog of unpaid claims, with the RAF simply stalling many settlements. Its actuarial liabilities had exploded to an estimated R322-billion, as referenced in its 2020 annual report. Fuel levy hikes In a deeply troubling move, Letsoalo and the RAF Board attempted in 2021 to manipulate the fund's finances by rewriting its accounting policies to reduce liabilities by R306-billion, effectively hiding the problem rather than fixing it. Thankfully, the Auditor-General rejected this cunning plan, and the matter was taken to court. During these loss-of-control years, the public paid a heavy price. Between 2009 and 2022, the RAF levy on the fuel price shot up 360%, from 47c to R2.18 per litre. These hikes inflated the cost of transport, food, and consumer goods for every South African. Instead of fixing the RAF's broken systems, the government simply passed the costs on to the public through excessive, above-inflation levy increases. Had the RAF levy increased only at the rate of inflation, it would have reached just 94c by 2022 – not R2.18. In real terms, the RAF received around R200-billion more than it would have under inflation-linked increases, which is essentially a hidden tax caused by incompetence, maladministration and poor political will. Minister Creecy's intervention must now be the start of a serious turnaround. The next step is critical: appointing a capable, independent and professional board with the skill and courage to fix this institution. That board must recruit qualified executives and people with experience in managing risk, claims, and fraud prevention. South Africa has many capable, retired insurance industry professionals with a deep understanding of complex claims environments and the controls needed to stop internal and external abuse. These are the people the RAF desperately needs. I would also urge the minister to send a strong and unambiguous message to the ANC's cadre deployment machinery – hands off the RAF. It's time to rebuild this institution based on merit, integrity and competence. Not politics. The pain inflicted on accident victims, the public purse, and our economy by a broken RAF is incalculable. Fixing it will take courage and resolve, but it must be done. The window for action is now open. Minister Creecy must not waste it. DM
IOL News
16-07-2025
- Business
- IOL News
A timeline of turmoil: How RAF's board came to be dissolved
Minister of Transport, Barbara Creecy, on Tuesday confirmed that she had decided to dissolve the Board of the embattled Road Accident Fund (RAF). Image: File Minister of Transport, Barbara Creecy, on Tuesday confirmed that she had decided to dissolve the Board of the embattled Road Accident Fund (RAF). The state-owned entity responsible for compensating victims of road accidents has faced significant challenges over the years, including costly legal battles, internal conflicts, and prolonged vacancies in key leadership positions. These problems are also said to have made it difficult for the fund to operate effectively, causing delays in claim processing and putting additional pressure on its financial resources. Following the Minister's announcement on Tuesday, several political parties expressed strong support for the decision, describing it as a necessary and long-overdue step to address the deep-rooted challenges at the entity. With uncertainty surrounding the RAF, IOL takes a closer look at the sequence of events that led to the dissolution of the Board at the state-owned entity. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading Key events leading to the dissolution of the RAF board 14 April 2025 In a media briefing, RAF CEO Collins Letsoalo denied all allegations related to a R79 million lease deal currently being investigated by the Special Investigating Unit (SIU). He rejected claims that procurement rules were bypassed to award the lease for the RAF's Johannesburg offices and said the process followed proper procedures. May 28, 2025 The RAF Board and senior officials presented themselves before Parliament's Standing Committee on Public Accounts (SCOPA), where they were met with rigorous questioning. Committee Chairperson Songezo Zibi highlighted that crucial positions, such as Head of Legal and Chief Claims Officer, had remained unfilled for more than two years. The committee also expressed concerns regarding the costly legal battles that the entity was losing, as well as the growing backlog of unpaid claims. June 3, 2025 Letsoalo was suspended by the Board, allegedly for failing to appear before SCOPA in breach of a statutory summons. His absence from the hearing incited outrage among MPs and exacerbated the ongoing governance crisis. The suspension intensified internal tensions, with some board members reportedly divided over how to address the situation. June 5, 2025 Creecy issued letters to the eleven members of the RAF Board, allowing them to make representations regarding her intention to dissolve the Board due to their failure to discharge their fiduciary duties effectively. 24 June 2025 SCOPA announced a full-scale parliamentary inquiry into the entity, citing ongoing allegations of financial mismanagement, wasteful spending, and governance failures. The Committee also said its decision came after 'months of repeated attempts to obtain truthful, complete information from the RAF Board and executive management to little avail.' June 27 2025 RAF responded to the upcoming SCOPA inquiry by pointing out improvements in its operations. It said claimant payments rose to 83% of costs in 2023/24, while administrative expenses dropped to 17%. The fund acknowledged its long-term financial challenges but stressed ongoing efforts to improve governance, including dedicated ethics and forensic teams and a fraud hotline. July 13 2025 Letsoalo and suspended Chief Investment Officer Sefotle Modiba accused the legal sector, including parts of the judiciary, of widespread corruption affecting the fund. They alleged that RAF had been exploited for financial gain by certain law firms and that this systemic corruption was deeply entrenched. July 15 2025 Minister of Transport Barbara Creecy announced the dissolution of the board, citing persistent governance and operational challenges that undermined the fund's ability to fulfil its statutory mandate. IOL Business Get your news on the go, click here to join the IOL News WhatsApp channel
Eyewitness News
15-07-2025
- Business
- Eyewitness News
Suspended RAF CEO Letsoalo says he helped save R50 million
JOHANNESBURG - Suspended Road Accident Fund CEO, Collins Letsoalo, said that he helped the fund save R50 million during his tenure, achieving all key objectives set for him since taking office in 2020. Letsoalo was speaking at a media briefing in Pretoria on Saturday, alongside suspended chief investment officer, Sefotle Modiba. ALSO READ: • 'Do you want us to die in silence?' Suspended RAF execs claim they're receiving death threats • Modiba and Letsoalo say their suspension from the RAF is 'baseless' • RAF rescinds decision to place CEO Letsoalo on special leave, replaces it with suspension • SIU probing RAF CEO Collins Letsoalo over R79m lease • Suspended RAF CEO Letsoalo will still receive his full pay & benefits
News24
15-07-2025
- Business
- News24
Creecy dissolves board of Road Accident Fund amid governance failure
Minister of Transport Barbara Creecy has dissolved the board of the Road Accident Fund (RAF) after a litany of operational and governance failures at the entity. 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.
IOL News
14-07-2025
- Politics
- IOL News
Collins Letsoalo, the suspended RAF CEO claims corruption within the legal fraternity
Collins Letsoalo, suspended RAF CEO during a media briefing claimed there is corruption within the legal fraternity Image: File SUSPENDED Road Accident Fund CEO Collins Letsoalo, during a media briefing held on Saturday, together with chief investment officer Sefotle Modiba, attributed many of the problems at the fund to 'corruption' within the legal fraternity, which he claimed included the judiciary. Letsoalo and Modiba, who has also been suspended, said they were being targeted for trying to expose corruption within the fund. The aim of the briefing was to provide 'context' into the reasons behind their suspensions. While Letsoalo was soon due to once again face Judge Nasious Moshoanathe to ask for leave to appeal against the judgment in which the judge refused Letsoalo's urgent application to immediately be reinstated, Letsoalo was clear that he thought the judge was biased from the start. He said his and Modiba's journey at the RAF was one of victimhood. 'We have been victimised all the time. One does not know why. It would seem people want to believe when we arrived at the RAF everything was fine, but that is not true.' Letsoalo said before he took over in 2020, the RAF was repurposed into a looting vehicle where people could 'loot legally." He referred to one law firm, which he said at the time made R1.2 billion a year from the fund. 'We are dealing with corruption, which permeates itself across the legal fraternity. Our judiciary comes from the legal fraternity. So the question you must ask yourself is when is this Damascus moment when this plaintiff attorney or panel attorney suddenly becomes a judge and suddenly becomes honest?' Letsoalo said while he has evidence against the 'corrupt' legal fraternity, nobody wants to hear him. He was told to present his evidence to the Judicial Service Commission, but believes that the JSC will, in any event, do nothing about it. Speaking about first being placed on special leave and later on suspension, Letsoalo said the reason given was that he did not attend a Scopa meeting on May 28. But, he explained, he was placed on special leave the previous day and told not to attend the Scopa meeting. 'Then they tell me I'm placed on special leave because I did not attend Scopa. It's absolute nonsense, but certain judges believe they were right,' he said in referring to Judge Moshoanathe's findings against him during his recent urgent application to have his suspension lifted. Letsoalo also referred to the fact that his urgent application was moved by the judge president from being heard on the urgent roll to a week later when it was placed on the special motion roll. He said the judge who was due to hear the matter was changed twice - and that the matter was eventually given to Judge Moshoanathe - who issued a scathing judgment against him. He also questioned how, under these circumstances, he was still slapped with a costs order. But, Letsoalo said, he was a man of integrity and he was ready for the battle to prove that the judiciary had been captured. 'I will show you the capture of the judiciary - they close ranks and they change the rules,' he said.
