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Daily Maverick
6 days ago
- Business
- Daily Maverick
‘A journey of victimhood' — suspended executives say they were targeted for exposing corruption at RAF
Collins Letsoalo and Sefotle Modiba said their actions saved the fund significant money, and their suspensions were politically motivated attempts to undermine their reforms. Suspended Road Accident Fund (RAF) executives Collins Letsoalo and Sefotle Modiba allege they were targeted for exposing deep-seated corruption within the fund. At a press briefing on Saturday, CEO Letsoalo and Modiba, the acting chief investment officer, said there were widespread systemic issues within the RAF, including fraudulent claims, questionable legal practices and a misrepresentation of the fund's financial liabilities. They contended that their suspensions were a direct result of their attempts to implement reforms that challenged established interests, alleging a pattern of judicial bias, questionable actions by other entities, and a desire to revert the RAF to a less transparent, more vulnerable state. They said their actions saved the fund significant money, and their suspensions were politically motivated attempts to undermine their reforms. This comes after Parliament's Standing Committee on Public Accounts (Scopa) in June announced that it would launch a full committee inquiry into the RAF following concerns about financial mismanagement, irregular expenditure, procurement irregularities, cash flow and investment disclosures, and non-compliance with financial regulations. Convoluted system In addition to the RAF's R340-billion in liabilities, the Auditor-General has repeatedly pointed out irregular expenditures, procurement failures and inadequate internal controls. All of this while victims of road accidents face significant delays in claim payouts, leaving thousands trapped in a convoluted system that has been made worse by poor management. Letsoalo, who was appointed as acting CEO in April 2020 under the then minister of transport, Fikile Mbalula, and whose appointment was made permanent in August 2021, was suspended by the RAF board on 3 June for insubordination related to his refusal to appear before a Scopa meeting. He launched a court bid to be reinstated, but the Gauteng Division of the High Court dismissed it on 26 June, finding that Letsoalo had failed to show he had any legal right to an urgent interdict. Modiba was placed on precautionary suspension on 17 June due to the circumstances surrounding the termination of his previous employment with the City of Johannesburg, among other things. In a letter to Modiba's lawyer, Scopa's chairperson, MP Songezo Zibi, said the committee was concerned that the RAF had neither vetted Modiba nor inquired into the City of Johannesburg terminating his employment. Scopa had received a letter from Johannesburg's executive mayor stating that Modiba had not faced a disciplinary hearing because he had resigned. This, according to Zibi, directly contradicted Modiba's assertion that charges of gross negligence, gross dishonesty and gross dereliction of duty against him were withdrawn. On Saturday, before the briefing, Zibi posted: 'This week, there have been attempts to get the decision of Scopa to hold a Committee Inquiry into the RAF rescinded. They have failed. There will be accounting for public funds under oath, in public. We will upload every document the public is entitled to see on the Parliament website.' At the press briefing on Saturday, Modiba said his and Letsoalo's suspensions were primarily because of their efforts to reform and clean up the RAF. 'I identified that there was cherry picking and prioritisation of claim payments by certain employees within the RAF, driven by bribery. I found out there was a corporatised, intentional approach to prioritising certain legal firms' claims over others. This thing was termed 'fixed allocation'. 'So you had a few legal firms, predominantly white, who would then get the biggest slice of the fuel levy as it was paid into the fund's account, while the marginalised would have certain claims of theirs which were not paid. Some of these claims were sitting at over 1,000, 2,000, 3,000 days of age, versus these other prioritised ones whose age was sometimes even lower than 30 days,' said Modiba Letsoalo's version 'Ours has been a journey of victimhood where we are just victimised all the time. One does not know why we are victimised,' said Letsoalo at the briefing. He said there were major problems at the RAF before he and Modiba arrived, and it had turned into 'a looting vehicle that people could do lawfully'. He said he was placed on special leave on 27 May, the day before he was scheduled to appear at Scopa. He was then suspended for not attending Scopa on the day he was on special leave, which he called 'absolute nonsense'. Letsoalo detailed how his court case challenging the suspension was moved and reassigned to different judges multiple times under 'strange circumstances'. He said he had received threats because of his actions at the RAF. Now the RAF is facing a substantial financial challenge with a reported liability of R322-billion. However, Letsoalo said: 'There's no such thing [as a R322-billion liability]. The reality is that we are dealing with previously advantaged individuals who had cornered the RAF, and they continue to do that. And they buy people. They tried to buy me, I refused.' Ahead of the media briefing, the suspended executives said they would show how a R322-billion 'phantom liability' was created to loot at least R250-billion from the national coffers and the alleged involvement of the judiciary in creating a crisis at the RAF. Letsoalo said that the International Monetary Fund and the Financial Services Board had reclassified the RAF as a social security fund or social benefit fund, meaning that its business model was 'not based on insurance principles'. He contended that the Auditor-General of South Africa and the Accounting Standards Board were incorrectly pushing the RAF to account like an insurer, which caused the liability to 'balloon'. He said that upon implementing a new strategy in FY2020, the RAF under Modiba's leadership had reduced the short-term liability from R19-billion in November 2019 to R8.27-billion by March 2024. He claimed they reduced the overall liability by R304-billion from R320-billion in 2020 and that the 'actual liability was sitting at less than R20 billion'. Modiba's version Modiba was adamant that the charges against him by the City of Johannesburg were 'fully withdrawn' before he joined the RAF, and the RAF had conducted a screening for criminal records and qualifications when he was hired. He said he had provided correspondence to the RAF proving no charges were pending, but it nevertheless proceeded with his suspension. He added that the State Security Agency's vetting of him was almost complete when he was suspended. He questioned whether his suspension had a 'racial connotation,' noting that his replacement was a 'young gentleman, very professional', who is white. Modiba claimed this person was not vetted and lacked the experience to run an investment management team. Modiba's press briefing presentation Modiba said his suspension posed risks to the RAF's stability and progress. Alleged underlying reasons Both executives argued that their suspensions were a direct consequence of their successful efforts to combat corruption and improve the financial stability of the RAF, which they claimed upset powerful individuals and entities who had benefited from the fund's mismanagement. They claimed that state institutions, particularly the Special Investigating Unit (SIU) and Scopa, had been 'repurposed and weaponised' against them. DM
IOL News
04-07-2025
- Business
- IOL News
RAF CEO intends to appeal against suspension ruling in court battle
Collins Letsoalo, suspended RAF CEO will appeal the judgment not lifting his suspension Image: File Suspended Road Accident Fund (RAF) chief executive Collins Letsoalo has hit back at the judge who refused to lift his suspension, citing nearly 40 points in which he claimed the judge had erred in his judgment. Letsoalo has applied for leave to appeal against last month's judgment in the Gauteng High Court, Pretoria. In a scathing judgment, Judge Nasious Moshoanathe said Letsoalo's application was deemed vexatious. He found Letsoalo's suspension effected by the RAF Board earlier this month to be lawful, rational, and reasonable. While the judge had some harsh words regarding Letsoalo's earlier urgent application, the suspended CEO will again have to face the judge in court, as Judge Moshoanathe will have to decide on whether to grant him leave to appeal or not. 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 In slapping Letsoalo with the legal costs, the judge last month said: 'The present litigation is aimed at protecting pecuniary interests as opposed to protecting a constitutional right. This court takes the view that the present application is frivolous and vexatious. Mr Letsoalo, for very selfish reasons, it seems, disavowed adequate and substantial remedies available to him in terms of the LRA (Labour Relations Act).' In his leave to appeal application, Letsoalo remarked that the judge was biased from the start, and Letsoalo had the reasonable apprehension that the judge was assisting the respondents, being the RAF and its board. He said most of the issues the court had decided upon in its judgment were raised by the court itself and not by the respondents. In his notice for leave to appeal, Letsoalo made an issue of the fact that the court did not find that there was no resolution by the RAF Board to appoint the firm of attorneys which had represented them in court. His counsel during legal arguments in the main application said the matter should have proceeded on an unopposed basis. In one of his many points where he felt the court had erred in turning down his application, Letsoalo said the judge chose to ignore his entire version as to why his suspension was unreasonable and irrational. He also objected to the judge slapping him with the legal costs and for not accepting the argument made by his counsel that this was a constitutional matter, thus he should not face the financial consequences of losing the legal battle.
IOL News
03-07-2025
- Business
- IOL News
Collins Letsoalo challenges suspension ruling in high-stakes appeal
Collins Letsoalo, suspended RAF CEO will appeal the judgment not lifting his suspension Image: File Suspended Road Accident Fund (RAF) chief executive Collins Letsoalo has hit back at the judge who refused to lift his suspension, citing nearly 40 points in which he claimed the judge had erred in his judgment. Letsoalo has applied for leave to appeal against last month's judgment in the Gauteng High Court, Pretoria. In a scathing judgment, Judge Nasious Moshoanathe said Letsoalo's application was deemed vexatious. He found Letsoalo's suspension effected by the RAF Board earlier this month to be lawful, rational, and reasonable. While the judge had some harsh words regarding Letsoalo's earlier urgent application, the suspended CEO will again have to face the judge in court, as Judge Moshoanathe will have to decide on whether to grant him leave to appeal or not. 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 ✕ In slapping Letsoalo with the legal costs, the judge last month said: 'The present litigation is aimed at protecting pecuniary interests as opposed to protecting a constitutional right. This court takes the view that the present application is frivolous and vexatious. Mr Letsoalo, for very selfish reasons, it seems, disavowed adequate and substantial remedies available to him in terms of the LRA (Labour Relations Act).' In his leave to appeal application, Letsoalo remarked that the judge was biased from the start, and he (Letsoalo) had the reasonable apprehension that the judge was assisting the respondents (the RAF and its board). He said most of the issues the court had decided upon in its judgment were raised by the court itself and not by the respondents. In his notice for leave to appeal, Letsoalo made a big issue of the fact that the court did not find that there was no resolution by the RAF Board to appoint the firm of attorneys which had represented them in court. His counsel during legal arguments in the main application said the matter should have proceeded on an unopposed basis. In one of his many points where he felt the court had erred in turning down his application, Letsoalo said the judge chose to ignore his (Letsoalo's) entire version as to why his suspension was unreasonable and irrational. He also objected to the judge slapping him with the legal costs and for not accepting the argument made by his counsel that this was a constitutional matter, thus he should not face the financial consequences of losing the legal battle.
IOL News
07-06-2025
- Business
- IOL News
Collins Letsoalo's urgent plea for reinstatement amid life-threatening concerns
Suspended Road Accident Fund chief executive Collins Letsoalo is heading to the Gauteng High Court, Pretoria, to challenge his suspension, get his job back, and retain his security detail amid threats to his life. Image: Supplied Suspended Road Accident Fund (RAF) chief executive Collins Letsoalo has launched an urgent 'life and death' high court application challenging the troubled entity's board, demanding reinstatement and stopping the advertising of his position. In papers filed at the Gauteng High Court, Pretoria, on Friday, Letsoalo seeks an order declaring that the RAF Board's decision to suspend him earlier this week be set aside as it was unlawful, irrational, and unreasonable. He wants to immediately resume his duties as the fund's boss. He also wants to interdict and restrain the RAF and its board from advertising the position of chief executive pending the finalisation of the process to re-appoint him to the position. Letsoalo has been RAF chief executive since 2020, with his five-year contract due to end on August 6, but the board has resolved to renew his fixed-term contract upon its expiry. 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 ✕ In addition to wanting to return to work, he has also asked the high court to ensure that he keeps his security detail. 'As part of my fringe benefits relating to security, I am provided by the first respondent (RAF) with security vehicles and security personnel. There have been threats made to my life during the course of my employment as the chief executive of the RAF. 'The threats come from various sectors, chief among them from the taxi industry. There was a high-risk assessment conducted on me. I have security guards placed at my house,' Letsoalo stated in his founding affidavit. He fears for his safety and that of his family, and he is also entitled to R480,000 a year security. Among the conditions of his suspension is that he return all the RAF property in his possession, including the provision of security. 'There is no doubt that this is a matter of life and death, and I cannot wait any longer and need urgent relief now and not later. A grave injustice will befall me or my family if the urgent relief is not granted, especially when the news of my suspension has been widely circulated in print media, television, and social media,' explained Letsoalo. He added that the risk of harm was real, as if he returned security vehicles and personnel, he and his family would be left without protection and placed in harm's way. Letsoalo also detailed an incident of his life being targeted. 'Last year, a group of heavily armed men arrived at our offices in Centurion demanding to see me. They tied the security personnel with ropes. It was the day we were having a board meeting, and fortunately, the board meeting was online and not at the office,' he explained. A case was opened with the police, and Letsoalo revealed that it later transpired that the individuals were sent by someone in prison to harm him. He undertook to provide the judge presiding over his urgent application with a case number. 'After that incident, the crime intelligence branch of the SA Police Service advised the first respondent (RAF) to beef up my security. The reason why I was provided with security vehicles was that last year, there was an attempt on my life coming from the taxi industry,' he said. Letsoalo was placed on special leave on May 27, but this was withdrawn on Tuesday, June 3, when he was suspended. He indicated that should his application not be heard urgently, it would be delayed for months, and in that time, his employment contract expires in August, and his potential re-employment with the concurrence of Transport Minister Barbara Creecy and Cabinet's approval would in all probability not happen. 'I disavow any reliance on Section 186(2) of the Labour Relations Act as amended, as I do not claim that my suspension was unfair, hence I do not approach the Commission for Conciliation, Mediation and Arbitration. I do not claim the conduct of the respondents (RAF and its board) constitutes unfair labour practice,' he explained. However, Letsoalo categorically and unambiguously stated that his case is that his suspension was unlawful, irrational, and unreasonable. In the period leading up to his suspension, he described Board Chairperson Lorraine Francis as confrontational, accusing him of changing his tune about attending meeting of the National Assembly's Standing Committee on Public Accounts (Scopa) and indicating that he must take leave to clear his mind and think about issues as he had been under extreme pressure, which she stated was compassionate leave. Letsoalo said he refused to take compassionate leave after Francis stated that the board was worried he was taking instructions from his lawyers and wanted him to choose. 'I felt aggrieved that I had to learn about my suspension during the proceedings of the portfolio committee (Scopa) meeting. While I was watching the proceedings of the portfolio committee, I received an SMS from the chairperson of the board, who did not attend the portfolio committee meeting on the allegation that she was attending a prior personal matter,' he said. Letsoalo added that Francis also told him to check his e-mails and found the letter informing him of his suspension and withdrawing the earlier special leave. The suspension was allegedly due to adverse findings made by the Special Investigating Unit (SIU), which he said has been ongoing since 2022. Letsoalo complained that the SIU never gave him a right of reply before presenting its preliminary findings before Parliament. 'If the board felt so strongly about my alleged refusal to attend the Scopa meeting, why could they not use the reason for my refusal to attend the Scopa meeting as a reason for my special leave?' he asked. Letsoalo accused the board of damaging his reputation and integrity and believes that after the board received legal opinion that his special leave was legally suspension, they hastily looked for a reason to suspend him.
