Staff Reporter
Parliament’s Standing Committee on Public Accounts (SCOPA) is this week set to place suspended Road Accident Fund (RAF) chief executive Collins Letsoalo and former board members under oath, as it moves into the eighth week of its inquiry into the finances and governance of the embattled fund.
The committee has set Tuesday aside for Letsoalo’s appearance and Parliament has issued a summons compelling him to attend, going as far as posting the summons online after the sheriff could not locate him.
If he stays away, SCOPA will meet to decide on its next steps, chairperson Songezo Zibi said in a statement.
Letsoalo was placed on precautionary suspension in May over a R79 million office lease and other contracts flagged by the Special Investigating Unit (SIU), which is probing alleged corruption and maladministration at the RAF.
He has denied any wrongdoing and has previously described aspects of the SIU’s investigation as a “fishing expedition”.
Earlier hearings heard claims that Letsoalo demanded an armoured BMW costing more than R4 million and expanded his protection detail from three to nine bodyguards, decisions the RAF’s head of security said were taken without a formal threat assessment and pushed up security costs.
MPs were also told that Letsoalo resisted previous invitations to appear before SCOPA, undermining the committee’s authority and forcing MPs to resort to the summons.
On Thursday, former RAF board members Lorraine Francois, Thembelihle Msibi, Lekau Moses Nyama and Nomonde Mabuya-Moloele are due to give evidence.
Their names have surfaced repeatedly in earlier testimony, which raised questions about governance failures, including how a controversial accounting policy was handled and how executive suspensions were managed.
Transport Minister Barbara Creecy dissolved the RAF board in July, saying she had lost confidence in it after costly litigation over the fund’s accounting standards, the “reckless” handling of the CEO’s suspension, and frequent default court judgments that worsened the RAF’s liabilities.
She has since appointed an interim advisory committee and asked the SIU to widen its investigation to cover more recent events.
SCOPA’s inquiry, launched in June, followed months of frustration in getting full and reliable information from RAF management and the board, together with whistle-blower allegations of supply-chain irregularities worth more than R1 billion and long-vacant senior posts in key claims and legal roles.
In recent testimony, former acting chief financial officer Boitumelo Mabusela told MPs the RAF had switched to a new accounting framework to contain ballooning liabilities and avoid remaining “technically insolvent”, even as total exposure could reach about R500 billion.
The shift was intended to make the RAF look more like a social benefit scheme than an insurer, she said, but she conceded it would not, on its own, stabilise the fund’s finances.
Law Society of South Africa president Nkosana Francois Mavundlela told the inquiry that RAF management, “aided by the board”, issued unlawful management directives, defied court orders and failed to pay settlements, leaving some crash victims destitute while increasing wasteful expenditure through adverse cost orders and interest on unpaid judgments.
Acting chief corporate support officer Mpho Manyasha, currently on precautionary leave, described the RAF Act and the fund’s new claims system as “cruel” to the poor.
She said a backlog of about 250 000 claims could take three to five years to clear, with high upfront costs and complex processes favouring lawyers over claimants who approached the RAF directly.
Zibi has said SCOPA wants the inquiry to lead to recommendations that restore legality, improve access to compensation and stabilise the RAF’s funding model, which he has previously said was a “no-hope” system in its current form.
INSIDE POLITICS