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The Citizen
9 hours ago
- Business
- The Citizen
Two law firms get lion's share of RAF's R103m legal services spend
A disproportionately high 84%. Scopa wants to know why. Scopa chair Songezo Zibi was unimpressed that Scopa had to ask three times before the RAF supplied information about the top 10 law firms it uses. Picture: Michel Bega/ The Citizen The Road Accident Fund (RAF) paid 84% of the total R103.1 million it spent on corporate legal services in its 2024 financial year to Malatji & Co Attorneys Inc and Maponya Ledwaba Attorneys – just two of the 43 legal firms on its panel. Malatji & Co was paid R55.87 million by the RAF in 2024 and Maponya Ledwaba R30.75 million. The RAF revealed this in a presentation to Parliament's Standing Committee on Public Accounts (Scopa) last week. These two law firms were also paid the bulk of the amount the fund spent on legal services in the RAF's 2023 financial year, with Malatji & Co paid R15.25 million and Mopanya Ledwaba R14.86 million of the RAF's total corporate legal services bill of R34.26 million that year. Zibi said Malatji & Co in particular received 'an incredibly disproportionate portion of the work allocated by the RAF'. Source: RAF presentation to Scopa, 28 May 2025 This information was initially not made available to Scopa and was only provided after committee chair Songezo Zibi complained that it had twice requested information about the top 10 law firms that received briefs from the RAF and accused the fund of deliberately withholding this information from the committee for improper reasons. ALSO READ: RAF CEO placed on special leave with full pay, as MPs grill fund Law firm selection Acting RAF CEO Phathutshedzo Lukhwareni said a panel of 43 law firms was appointed by the RAF in December 2023 but only 19 were briefed and paid during the 2023 and 2024 financial years 'at the time of preparing the report [presentation]'. Lukhwareni said the RAF has a panel of law firms and the selection takes place depending on the complexity of the matter. Scopa member David Skosana of the ANC asked what criteria is used to allocate briefs among the 43 law firms, why only 19 firms had been briefed and paid, and what measures are in place to ensure cost effectiveness and equitable distribution of work among the firms on the panel. Scopa member Mark Burke of the DA said Maponya Ledwaba Attorneys was extracting R30 million a year from the RAF but 'has got one director, three senior associates and an associate as a secretary and an admin clerk'. 'Does that seem right? Does it seem reasonable that a firm with that staff cohort could be extracting that value and delivering value?' asked Burke. Lukhwareni said some of those disbursements were for counsel fees and the cost is determined by the complexity of the matters they have handled and, if the matter is prolonged for a number of years and goes all the way to the Supreme Court of Appeal (SCA) for instance, the cost will obviously be significant. He said repeat briefings are determined by the successes the law firm have registered in the previous cases but declined to comment on the size of Maponya Ledwaba Attorneys because he is not privy to this information. 'To the extent that they [the two law firms] are in the panel and are competent to be in the panel, I don't see any unreasonability in that,' he said. ALSO READ: RAF needs a Settlement Hub for crash victims – expert The 'complex' cases Mampe Kumalo, who was referred to by Lukhwareni as the RAF's head of legal but is the fund's chief governance officer, said the complex cases these firms had or were handling include the Discovery Health, South African Revenue Service (Sars) and Auditor-General matters. The Discovery Health matters relate to various applications it launched against the RAF linked to the failure of the fund to pay the past medical expenses of claimants. The Sars matter involved an application to stop and prevent the tax collection authority from deducting R5.1 billion – or any part of this amount from the RAF levies it collects – to pay Eskom in terms of a settlement agreement between Sars and the power utility. ALSO READ: R25.5 billion deficit over five years — Can RAF afford to pay out claims? Repeat business despite repeated failure Zibi requested Kumalo to provide Scopa with a detailed breakdown by the close of business on Thursday of the fees paid to the two firms, including attorney fees, party-party costs, the cost of counsel and punitive costs orders against the RAF. 'The reason I want this is that you have persistently been clobbered on the AG matter by a law firm you continue to pay and see absolutely no reason to seek another law firm,' he said. Deputy Minister of Transport Mkhuleko Hlengwa said they must not be ignorant to the fundamental risk which prevails at the RAF because of the lawyers. 'The abuse of the system and the leakages of the money not reaching claimants in part is a result of the construct of the RAF. 'Why are we spending so much money on legal fees?,' he asked. 'We should be spending it on claimants because the whole system is fundamentally structured in a way which is problematic, hence the bill that we will be bringing … to parliament.' ALSO READ: RAF national crisis demands urgent action – expert Malatji responds Approached for comment about how the firm was able to receive such high fees from the RAF and if it has had any engagements with the Special Investigating Unit (SIU), Tebogo Malatji – MD of Malatji & Co Attorneys – told Moneyweb the firm has no way of knowing how the RAF decides to appoint attorneys on matters and what criteria it uses to do so. 'We are thus unable to tender the explanation you seek and suggest that you direct the question to the RAF. As the two directors primarily responsible for the servicing [of] the RAF, I have 31 years practice experience and Ms Sunelle Eloff, 24 years,' he said. 'We have personal injury law experience from the time that we started practice, have acted for the RAF for the most part of our practice lifespan and are therefore experts in the field. 'We are also one of the leading public law specialist firms in the country. 'We can only but speculate that the reasons the RAF instructed us in each instance that they did must have something to do with our years of experience, expertise and suitability for the matter at hand,' said Malatji. 'We have acted for the RAF in several of their most complex matters assisted by senior and junior counsel from the Bar and that accounts for the high value of payments to our firm displayed. 'Moreover, the figures displayed at Scopa as being payments to our firm consist primarily of counsel/advocates and other disbursements and to a lesser extent fees to our firm,' he added 'Until we are confronted with the actual number of instructions issued by RAF to its panel attorneys, we do not accept your assumption that it is our firm that allegedly received a disproportionate number of instructions.' Malatji added that the SIU has not engaged the firm on this issue. Maponya Ledwaba Attorneys has not responded to a Moneyweb request for comment on these same issues. This article was republished from Moneyweb. Read the original here.
The Citizen
4 days ago
- Business
- The Citizen
RAF ‘deliberately withholding' information from Scopa
The SIU tells us that one law firm has received an incredibly disproportionate portion of the work allocated by the RAF – Scopa chair. What is the RAF hiding, and why does its R1.2m-a-year chair not think it 'important enough' to make sure Scopa is given the information it asked for? Picture: Moneyweb The Road Accident Fund (RAF) has been accused of deliberately withholding information from Parliament's Standing Committee on Public Accounts (Scopa) about the top 10 law firms to receive briefs and payments from the fund. Scopa chair Songeza Zibi said on Wednesday he has asked for this information twice, the first time on 6 November 2024. He now believes 'this information is being deliberately withheld from the committee for improper reasons'. 'In the intervening period, the SIU [Special Investigating Unit] came to brief the committee and one of the things that they told us is that one of the law firms has received an incredibly disproportionate portion of the work allocated by the RAF. 'We do not know who that law firm is but you can see why that information is pertinent.' He said he cannot understand 'why it is easy to provide the plaintiff information but it seems impossible to provide the corporate legal services information' when the committee has asked for it in writing and in the sitting. Zibi said one of the things he is concerned about is that there are names of law firms that appear on both the lists. ALSO READ: RAF CEO placed on special leave with full pay, as MPs grill fund What does the RAF chair say? RAF chair Lorraine Francois apologised for the information not being provided and assured the committee it will be provided. Zibi said his difficulty is that Francois was in the meeting and knew Scopa asked for this information, which has not been provided. Zibi said it would not be unfair to hold Francois responsible for the failure to provide this information because the board is the accounting authority. Francois said the RAF board secretary takes note of Scopa's requirements but they always assume that it is the responsibility of the RAF CEO and executive to put this information together. Controversial RAF CEO Collins Letsoalo was placed on special leave with full pay and benefits by the board on Tuesday as a precautionary measure, but it was stated that this did not constitute disciplinary action. ALSO READ: R25.5 billion deficit over five years — Can RAF afford to pay out claims? Francois said most of the time, the information requested gets submitted directly to Scopa. 'We are a non-executive board so we don't review everything that comes here directly. 'That is the responsibility of the executive. Now I take full accountability and will ensure this happens. But to respect the request of this committee, I will now get to that level to make sure we will provide this information,' she said. Scopa member Mark Burke of the DA took issue with her answer and asked her what her annual compensation is. Francois said it is about R1.2 million. 'You get paid R1.2 million, which is the equivalent of a parliamentary salary and in your mind it's too operational for you to respond to the [request] for information,' said Burke. 'That [it] is beyond the scope of your work. Does that seem reasonable to you?' Zibi said he would answer this question. 'You [Francois] didn't think it was important enough because I have raised it twice and you simply didn't bother to check. 'We are not asking you to be operational. I am asking you to ensure that the needs of the committee are met by way of information,' he said. ALSO READ: RAF national crisis demands urgent action – expert 'Terminate the board immediately' Scopa member Alan Beesley of ActionSA followed up by stating that he found Francois's response dumbfounding. 'I saw the list that [Zibi] asked for. It's not an extensive list,' said Beesley. He requested that Deputy Minister of Transport Mkhuleko Hlengwa write letters of termination immediately to the RAF board because it is acting with immunity at the moment and treating parliament with disrespect, which is totally unacceptable. Acting RAF CEO Phathutshedzo Lukhwareni said a panel of 43 law firms was appointed by the RAF in December 2023, but only 19 were briefed and paid during the 2023 and 2024 financial years 'at the time of preparing the report'. Lukhwareni said a total R6 million was paid to these law firms in 2023, and around R104 million in 2024. He said it is a panel (of law firms) and obviously the selection takes place depending on the complexity of the matter. ALSO READ: RAF at risk of imploding No state security clearance Scopa was also told that not a single member of the RAF's board or senior executive has a security clearance from the State Security Agency (SSA). Lukhwareni said all the forms have been submitted to the SSA for the vetting process and interviews have been held with some of the executives but 'from here on it's beyond our control from a RAF perspective and SSA is responsible'. Zibi said something does not match because on 16 October 2024 he had an exchange with Francois about the vetting of officials and one official, Letsoalo, was said to be vetted. Zibi pointed out that Letsoalo said in March 2025 that he had been vetted – and the difference between what he said then and the state of affairs now 'means for the second time he lied to the committee'. 'I asked him about the treasurer at the RAF and he [also] lied about that.' Scopa member Patrick Atkinson of the DA said Letsoalo – who was initially acting CEO of the RAF and has now been CEO for five years – has been without a security clearance for seven years. Atkinson said the problem with that is that (without clearance) Letsoalo has not been legally appointed to that position and the question then is how would he have the authority to take the legal action he has against the Auditor-General (AG). ALSO READ: Expert accuses RAF of misrepresenting itself and its purpose The RAF unsuccessfully applied to review and set aside the AG's disclaimer of the fund's 2020/2021 annual financial results and to declare the disclaimer invalid and unlawful. The AG issued the disclaimer because the RAF used an accounting standard it was not permitted to use. 'I understand the court might give him six months to get his security clearance but not seven years,' Atkinson said. 'If he has been operating for seven years without a security clearance, it raises a massive legal issue about a whole variety [of issues] about the accounting principles, not paying out medical aids and foreigners and a whole variety of board minutes which are illegal.' Zibi said he would have to take legal advice on that and would not hold the Department of Transport or RAF responsible for the tardiness of the SSA. He said Scopa will take that up with the responsible minister, but the committee needs to work out if Scopa was misled when the CEO told the committee that he had been vetted. This article was republished from Moneyweb. Read the original here.
The Herald
4 days ago
- Business
- The Herald
DA welcomes RAF CEO Collins Letsoalo's placement on special leave
The placement of Road Accident Fund CEO Collins Letsoalo on precautionary leave is a long-overdue but necessary step to ensure that the Special Investigating Unit (SIU) can conduct its preliminary investigation without interference or influence, the DA said on Wednesday. The transport department said the decision was in the interest of good governance and a precautionary step to facilitate ongoing investigative processes. 'It does not imply any prejudgment or adverse finding against the CEO.' The DA said Letsoalo's temporary removal from office must facilitate full transparency and accountability, particularly in light of serious allegations concerning the RAF's governance failures, financial mismanagement and possible misconduct. Briefing the standing committee on public accounts (Scopa) last month, the SIU said it had experienced a lack of co-operation from the RAF in its investigation into the affairs of the entity. 'There were instances where the SIU had to resort to opening a criminal case against a RAF executive for failure to adhere to a lawful subpoena issued by the SIU in terms of the SIU Act,' SIU head Any Mothibi said last month. The DA said the ministry of transport's support for the decision to place Letsoalo on leave must be followed by full co-operation with Scopa and law enforcement agencies. 'The precautionary suspension of the CEO is just the beginning. The DA will not rest until justice and good governance are restored at the RAF.' TimesLIVE
IOL News
5 days ago
- Business
- IOL News
Collins Letsoalo placed on special leave as CEO of the Road Accident Fund amid corruption allegations
Collins Letsoalo placed on special leave as CEO of the Road Accident Fund amid corruption allegations Letsoalo, who appeared before the Standing Committee on Public Accounts (Scopa) this morning, was suspended with full pay. The Road Accident chief executive, Collins Letsoalo, has been placed on special leave. He has been implicated in several allegations of financial mismanagement and corruption, primarily centred around a controversial R79 million lease deal for the offices in Johannesburg. A preliminary report by the Special Investigating Unit (SIU) found that Letsoalo interfered with the procurement process by overturning a bid committee's recommendation to favour Mowana Properties, a losing bidder linked to the Government Employees Pension Fund, which ultimately secured the lease agreement.
IOL News
5 days ago
- Business
- IOL News
Collins Letsoalo suspended as CEO of the Road Accident Fund amid corruption allegations
Letsoalo, who appeared before the Standing Committee on Public Accounts (Scopa) this morning, was suspended with full pay. He has been implicated in several allegations of financial mismanagement and corruption, primarily centred around a controversial R79 million lease deal for the offices in Johannesburg. A preliminary report by the Special Investigating Unit (SIU) found that Letsoalo interfered with the procurement process by overturning a bid committee's recommendation to favour Mowana Properties, a losing bidder linked to the Government Employees Pension Fund, which ultimately secured the lease agreement.
