Top executives suspended at the Road Accident Fund in South Africa

The Board of the Road Accident Fund (RAF) has placed its Acting CEO, CFO, Chief Governance Officer, and the Head in the Office of the CEO on precautionary suspension with immediate effect.

This was announced by the board in a statement released on Friday 7 November.

“The decision was taken to allow for an independent and unhindered investigation into certain administrative and governance matters within the organisation,” said the board in its statement.

“These precautionary measures do not in any way constitute a finding of wrongdoing against the affected official but are intended to ensure the integrity and transparency of the investigative process.”

The entity added that interim arrangements have been made to ensure the RAF maintains its business continuity and delivers on it mandate to serve the people of South Africa.

“The RAF remains committed to sound corporate governance, accountability, and the highest ethical standards in all its operations,” said the RAF.

Disaster at the RAF

This news comes amid a probe into the RAF by the Standard Committee on Public Accounts (SCOPA).

The investigation is focused on the RAF’s “toxic leadership” and possible criminal misconduct, while the Auditor-General and SIU are also investigating the RAF regarding its alleged procurement and governance failures.

The RAF had R10.4 billion in unpaid claims at the end of the most recent financial year, as well as a total claims liability of R40.4 billion.

According to a report by Newsday, the monthly fuel levy revenue of about R4 billion cannot cover the RAF’s obligations, rendering the fund technically bankrupt.

The same report highlights “allegations of hidden funds, manipulated accounting, and asset-shielding tactics.”

Examples highlighted by Newsday include:

• The RAF spent R10 million on personal security for now-suspended CEO Collins Letsoalo, including hotel stays for his bodyguards.
• The entity has received an adverse or disclaimed audit opinion for the past five years.
• The RAF is running on a R27.8 million deficit – an amount that has been ballooning over the past ten years.
• 35 people are currently suspended on full pay, some for as long as four years – amounting to an expense of over R40 million.

Suspended with full pay

Speaking to Newzroom Afrika regarding the 35 RAF employees currently suspended with full pay, ActionSA MP Alan Beesley claimed that the suspensions were not legal.

According to Beesley, the RAF’s own policy states the no employee may be suspended without pay for longer than six months.

Furthermore, he said that many of the suspended employees were “good, competent staff who’ve taken a stand against the corruption and incompetence that has been plaguing the Road Accident Fund.”

He said that some of the suspensions were simply because “the CEO didn’t like them” because they “stood up to him.”

“The suspensions are taking so long because they know if it ever went to a proper disciplinary hearing, or CCMA, they would lose the case,” said Beesley.