Minister dissolves embattled RAF board amid governance chaos

News24

5 days ago

The decision comes against the backdrop of public allegations of corruption and mismanagement by suspended CEO Collins Letsoalo.
The minister requested an interim accounting authority and sought to expand the SIU's corruption probe.
Letsoalo was suspended last month for allegedly refusing to attend a portfolio committee on transport meeting.
Persistent governance failures and internal operations chaos at the Road Accident Fund (RAF) have prompted Transport Minister Barbara Creecy to dissolve the troubled entity's board.
This comes days after the entity's suspended CEO, Collins Letsoalo, and acting chief investment officer, Sefotle Modiba, briefed the media on the governance crisis and financial mismanagement at the entity.
Letsoalo was suspended last month for allegedly refusing to attend a portfolio committee on transport meeting but has since charged that he was targeted for cleaning up the entity.
According to a statement issued by the department's spokesperson, Collen Msibi, the RAF governance challenges and concerns were further confirmed through internal oversight and regulatory engagements.
Msibi cited the protracted and costly litigation pursued by RAF on the application of accounting standards, which has resulted in further strain on the entity's financial resources and capacity, as Creecy's reasons for firing the board.
Msibi said the minister also pointed to the inconsistent and, at times, reckless handling of the suspension of the CEO that attracted a legal challenge and institutional uncertainty.
He said Creecy had noted the frequent incurrence of default judgements against the RAF, exacerbating its contingent liabilities and weakening its financial sustainability.
The minister lamented deep divisions within the board itself, evidenced by most resolutions being passed using casting votes, rather than consensus, reflecting a lack of cohesion in critical decision-making processes.
She also decried the board's failure to fill at least two critical executive positions, those of chief claims officer and head of legal, which she said were critical to the mandate of RAF.
Msibi said this had resulted in the loss of confidence in the board's ability to run the entity effectively.
He said in response to these developments, Creecy has exercised her powers as an executive authority by undertaking interventions to safeguard the integrity of the institution and ensure continuity of operations.
On 5 June 2025, the minister issued letters to the 11 members of the RAF board, affording them the opportunity to make representations regarding her intention to dissolve the board due to their failure to discharge their fiduciary duties effectively. The representations were received and have been duly considered. Consequently, the board has been dissolved.
Collen Msibi
He said a submission has been prepared requesting Finance Minister Enoch Godongwana to appoint an interim functionary as accounting authority in accordance with the Public Finance Management Act.
Msibi said the proposed appointment was intended to prevent a governance vacuum while a new board was being constituted.
A draft public advertisement has been prepared to commence the process of appointing a new board, ensuring transparent and merit-based selection in line with applicable legislation. To support the development of a sustainable operational and governance model, the minister has initiated the appointment of a panel of independent experts to review the RAF's business processes and propose actionable recommendations. Members of the panel will be announced in due course.
Msibi
He said, furthermore, a request had been made to the graft-busting Special Investigating Unit (SIU) to establish if the current investigation under Proclamation 44 of 2024 covered the events of the last three months and that if not, to formally request the expansion of the scope to cover these events.
The response from the SIU in this regard is eagerly awaited. Minister Creecy has reiterated her department's commitment to continue to pursue all necessary measures to restore institutional stability and enhance the RAF's capacity to fulfil its statutory obligations to the public and ensure speedy and equitable access to the Road Accident Benefit Scheme for road accident victims.
Msibi said the minister further stressed her department's intent to finalise the Road Accident Benefit Scheme Bill, which will introduce a no-fault system to make it easier for road accident victims to access the benefits without costly legal bills.