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IOL News
5 days ago
- Business
- IOL News
Road Accident Fund acknowledges Scopa's inquiry into its operations
The Standing Committee on Public Accounts has resolved to launch a full committee inquiry into allegations of maladministration, financial mismanagement, wasteful and reckless expenditure, and related financial misconduct at the Road Accident Fund. Image: File The Road Accident Fund (RAF) said on Friday it noted the decision of the Standing Committee on Public Accounts (Scopa) to institute a full committee inquiry into its affairs. This comes days after Scopa resolved earlier this week to launch a full committee inquiry into allegations of maladministration, financial mismanagement, wasteful and reckless expenditure, and related financial misconduct at the RAF. The decision was taken after attempts by the committee to obtain truthful, complete information from the RAF board and executive management came to no avail. The RAF said in a statement it respected Scopa as an accountability body which derives its functions and powers from Rule 245 of the rules of the National Assembly. 'We will continue to account to the people of South Africa through this important organ of Parliament. We reiterate and put emphasis on what we have already reported in the RAF annual reports for the last three years, that the RAF has been financially unsustainable since its establishment in 1946.' The RAF stated that it has been the subject of multiple commissions of inquiry, and the common thread across all commissions' findings has been the disconnect between the funding model and the benefit structure. 'The unsustainable funding and operating models were further compounded by an increase in administrative costs, driven mainly by legal and medical costs,' said the accident insurance fund. In a memorandum prepared for Scopa, committee Chairperson Songezo Zibi cited issues related to the organogram and vacancies at the RAF. Zibi also mentioned the submission of inaccurate, misleading, and/or false information to Parliament by the entity. There were also issues related to whistle-blower reports on two media services contracts worth R1 billion, RAF's acquisition of offices, as well as litigation against the Auditor-General and matters of rule of law. 'The information I set out raises numerous and serious concerns about corporate governance at the RAF,' he said. Scopa's secretariat is expected to draft the terms of reference for the inquiry to be considered by the MPs on July 1 and then use the period afterwards to prepare for the inquiry. The DA wants the inquiry to cover all of the outrageous financial mismanagement identified over the past months and years at the RAF. In the letter to Zibi, DA MP Patrick Atkinson said they welcomed the resolution to initiate the parliamentary inquiry into the worsening crisis at the RAF. 'However, for this inquiry to be meaningful and in the public interest, it must be comprehensive in scope. A surface-level examination will fail to address the systematic mismanagement, misconduct and abuse of public funds that have defined the RAF's recent history,' Atkinson wrote. The RAF defended its use of litigation against the Auditor-General, which will form part of the inquiry. The entity has pursued the legal action despite being advised not to do so by the Transport Department. The RAF said it is only in the audit of financial statements that the disagreement with the Auditor-General of South Africa on the accounting policy change resulted in an adverse opinion. It also said it has internal forensic investigations and ethics divisions to ensure proper and transparent management of corrupt and unethical practices. 'An independently managed ethics and fraud hotline is available for staff and stakeholders to anonymously report any unethical and corrupt practices. Furthermore, the introduction of the RAF Contact Centre will go a long way in ensuring that claimants' queries are addressed.' The RAF said despite its positive strides, it continued to manage challenges associated with a transforming organisation. 'The 2025–30 strategic plan presents an opportunity to optimise areas that have worked and to improve where gaps still persist. To this end, the RAF proactively subjected the 2025/26 annual performance plan to an independent review by the AGSA. 'The RAF reiterates that the most urgent task required to ensure financial and operational sustainability for the Fund is a legislative review.'
News24
25-06-2025
- Business
- News24
Tough economy driving unethical practices in attorneys handling RAF claims, LPC tells Parly
Standing Committee on Public Accounts chair Songezo Zibi. Gallo Images/Jeffrey Abrahams Be among those who shape the future with knowledge. Uncover exclusive stories that captivate your mind and heart with our FREE 14-day subscription trial. Dive into a world of inspiration, learning, and empowerment. You can only trial once.
IOL News
24-06-2025
- Politics
- IOL News
Scopa to hold inquiry to investigate maladministration at the Road Accident Fund
Scopa chairperson Songezo Zibi said they have decided to institute a parliamentary inquiry into the affairs of the troubled Road Accident Fund (RAF). The Standing Committee on Public Accounts on Tuesday said it has decided to institute a parliamentary inquiry into the affairs of the troubled Road Accident Fund (RAF). Scopa chairperson Songezo Zibi made the proposal that the committee look into matters related to maladministration and allegations made about the institution. 'There are lots of allegations and counter-allegations. Everybody involved needs to get their opportunity to present their side of the story before the committee. We need to give everyone an opportunity and to do so under oath,' Zibi said. Briefing the MPs, Zibi referred a memorandum to the committee's secretariat to prepare on issues that have beset the RAF. 'The ministry and RAF sent enormous volume of documents. We synthesise them and prepared a memo and shared with members. The only information redacted is critical whistle blower information.' In his memorandum, Zibi cited issues related to the organogram and vacancies at the RAF. He also mentioned the submission of inaccurate, misleading and or false information to Parliament by the entity. There were also issues related to whistle-blower reports on two media services contracts worth R1 billion, RAF's acquisition of offices as well as litigation against the Auditor-General and matters of rule of law. 'The information I set out raises numerous and serious concerns about corporate governance at the RAF,' he said. DA Patrick George Atkinson said the situation at the RAF was deeply concerning. "The kind of amounts we talk of could dwarf anything this committee has dealt with. It could make SAA look like a tea party by the amounts that are involved and the potential liability created for the state," Atkinson said. "If we can get to the bottom of the corruption and waste of money, the increase in a fuel levy might not even be necessary. The public pays for the corruption and maladministration in RAF. It is critical we get the bottom of it," he added. Atkinson noted that there had been discrepancies in what they were told by the RAF and what the whistle-blowers were revealing. ANC MP Helen Neale-May said there were concerns around governance and conduct of RAF with serious allegations of abuse of power, financial mismanagement and the disregard of legal procedures. "We have no other choice and let's see from them. It is just unbelievable," Neale-May said. His colleague Gijimani Skosana said the inquiry will assist stakeholders within and outside RAF to tell their stories. "Everyone will be speaking under oath, unlike now where we invite them for a committee conversation," Skosana said. UDM's Thandi Nontenja said the RAF seemed to be a law unto itself. "We really support your view that there must be an inquiry. Beside contradicting themselves, they are not forthcoming with information that is requested," Nontenja said. "They are hiding something. It is not something good. I hope that having an inquiry will give us a way to get to the root of what is really happening there. It is amazing they get away with everything," she added. MK Party's David Skosana said issues at the RAF touch a nerve of many people in the country and there was a lot of interest there. "When the CEO told us they saved over R20bn some of us applauded to say he has done well. The fact is that the CEO and team saved this country over R20m," Skosana said before questioning why certain names of companies were not named in the memorandum. His colleague Kwenzokuhle Madlala said he did not believe the RAF was performing optimally or that it has proper governance. "We see total collapse in all the institutions and RAF is not an exception," he said. EFF MP Veronica Mente did not see the need to institute an inquiry in RAF as she believed the matters did not warrant an inquiry. She said there were non-performing municipalities and issues of service delivery, as an example, that could be pursued. After the parties motivated for and against the parliamentary inquiry, it was decided to push ahead with it. Zibi said the committee secretariat will draft terms of reference to be considered by Scopa on July 1 and then use the period afterwards to prepare for the inquiry. He stated that once they completed the inquiry, they will consider all written evidence and testimony and then write a report with recommendations for the House.
The Citizen
24-06-2025
- Business
- The Citizen
Scopa launches inquiry into RAF misconduct claims
Whistleblower claims, governance failures, and vacant executive posts prompt Scopa to launch full inquiry into RAF operations. The Standing Committee on Public Accounts (Scopa) will investigate serious allegations of mismanagement, governance failures and financial misconduct at the Road Accident Fund (RAF). Scopa announced on Tuesday that it has resolved to initiate a comprehensive inquiry into allegations of maladministration, financial mismanagement, wasteful and reckless expenditure, and related financial misconduct at the RAF. The committee said the decision comes after months of several unsuccessful attempts by Scopa to obtain truthful, complete information from the RAF Board and executive management. RAF board failed to cooperate and disclose key information – Scopa 'The committee cannot perform its work effectively if state entities do not provide it with complete and truthful information with adequate context and supporting information,' the chairperson said in a statement. Among the committee's concerns are insufficient background checks on executive and senior management appointments who are entrusted with access to and oversight of substantial public funds. ALSO READ: RAF and its comms head found to have defamed Sunshine Hospital This is despite having a troubling employment and disciplinary record that includes accusations of making careless financial management decisions. The committee is also concerned about the subsequent refusal by the RAF to disclose to them where such funds are kept and for what purpose. Scopa is additionally troubled by the prolonged failure to appoint essential officials, including a chief claims officer, head of claims operations, head of legal, chief corporate support officer, and head of people management. Prolonged failure to appoint essential officials This comes as the RAF faces significant financial losses—either due to action being taken when it shouldn't be, or inaction when action is needed. Some of the issues also include failures of governance with a direct impact on the rule of law and the authority and powers of parliament, as well as Chapter 9 institutions tasked with performing oversight on behalf of the South African people. ALSO READ: State capture allegations come back to haunt RAF acting CIO The committee also expressed concern over numerous whistleblower reports alleging supply chain irregularities involving more than R1 billion, noting that internal management appears to be failing to apply proper controls. The committee said these allegations point to failure by the RAF Board to properly oversee management's decisions and actions in line with its statutory mandate. The chairperson of Scopa, Songezo Zibi, said an inquiry will give everyone involved or implicated an opportunity to state their case under oath and receive a fair hearing before the committee draws its conclusion. Inquiry will take place after August recess 'The volume of complaints and related documentary disclosures to the committee about the RAF make it necessary to examine them thoroughly and make such recommendations as may be necessary to ensure that the institution does its work within legal and constitutional prescripts and serves the public interest as intended,' Zibi said. The committee will approve the terms of reference on 1 July 2025, and the inquiry will take place after the August recess. ALSO READ: Two law firms get lion's share of RAF's R103m legal services spend The Association for the Protection of Road Accident Victims (APRAV) has welcomed Scopa's decision to initiate a full parliamentary inquiry after 'years of concern' about systemic mismanagement, growing dysfunction, and serious questions regarding financial and ethical oversight at the fund. 'This is a massive victory — not just for APRAV, but for every victim who has suffered silently under a broken and unaccountable RAF system,' said Pieter de Bruyn, speaking on behalf of APRAV. 'It is a long-overdue reckoning with a system that has failed too many for too long.' 'This is a massive victory' – APRAV As the inquiry process begins, APRAV called on victims, legal practitioners, former RAF employees and whistleblowers to come forward and share their evidence and experiences. 'Let this be the beginning of a new chapter for the RAF — one rooted in truth, accountability, and the collective will to do better,' said de Bruyn. NOW READ: RAF 'deliberately withholding' information from Scopa
The Citizen
02-06-2025
- 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.
