RAF CEO Suspended Over Scopa No-Show as Board Faces Governance Crisis

The Road Accident Fund (RAF) is once again at the center of controversy, with CEO Collins Letsoalo suspended by the board for refusing to attend a crucial parliamentary committee meeting. This dramatic development adds to the long-standing governance headaches plaguing the troubled fund, which continues to struggle under the weight of legal battles and leadership instability.

A Showdown with Parliament

Last week, Letsoalo’s refusal to appear before the Standing Committee on Public Accounts (Scopa) sparked outrage. The RAF board initially placed him on special leave with full pay — a move later rescinded during a tense emergency board meeting on June 2. Instead, the CEO was outright suspended for insubordination, a rare and serious step reflecting the growing impatience with management.

Nomonde Mabuya-Moloele, the RAF board’s vice chair, confirmed the decision to Parliament’s Transport Portfolio Committee, making it clear that this is no ordinary leadership hiccup. The situation underscores a wider crisis of confidence in how the RAF is run.

Legal Battles: A Fund Caught in the Crossfire

The RAF’s troubles go beyond internal politics. At the heart of the storm is an ongoing legal battle over the fund’s 2020/21 financial results, which the Auditor-General (AG) disclaimed due to disputed accounting standards. The RAF board has defied the Deputy Minister of Transport, Mkhuleko Hlengwa, by continuing litigation against the AG, despite explicit instructions to cease.

Hlengwa has not minced words. He labelled the RAF board incompetent and suggested ministerial intervention might be necessary to restore order. “All is not well in the RAF,” he said, referring to multiple court losses over accounting standards and governance issues that threaten the fund’s future.

This battle isn’t just legal wrangling; it impacts every South African who relies on the RAF for compensation after accidents. The recent Supreme Court of Appeal ruling classified the RAF as an insurer, raising concerns over increased liabilities and financial sustainability.

Public and Political Reaction

Social media has been abuzz with criticism and calls for accountability. Many South Africans express frustration over the RAF’s inefficiency and governance failures, especially given the critical role it plays in providing compensation to accident victims. Some voices call for a full overhaul of the board, echoing sentiments from Parliament’s committee members.

The situation also touches a nerve politically, with Scopa members calling for the dissolution of the current board and questioning its ability to lead the fund out of its troubles.

Internal Chaos: Management Shake-Ups and Suspensions

The board’s recent meeting saw further dramatic moves. Acting chief investment officer Sefotle Modiba was placed on precautionary suspension amid investigations related to his prior employment at the City of Johannesburg. The RAF is also prioritizing filling key executive vacancies, including chief claims officer and head of legal services — roles crucial for the fund’s turnaround.

Vice chair Mabuya-Moloele lamented the prolonged absence of a dedicated claims officer, with the CEO reportedly having to fill that role himself for over two years. “It’s unheard of that the CEO acts as both referee and player in managing claims — the fund’s core function,” she said.

A Long Road Ahead for the RAF

The RAF’s woes reflect deeper governance challenges that have plagued the institution for years. The tangled web of legal disputes, delayed appointments, and board-level discord only adds to the uncertainty facing South Africans relying on the fund’s services.

As the Transport Ministry gears up for a decisive meeting with the RAF board, many are watching closely to see if real change will finally take root — or if the fund will continue down a troubled path, to the detriment of those it serves.

In a country where road accidents cause thousands of deaths annually, the RAF’s proper functioning isn’t just bureaucratic noise; it’s a lifeline for many. With mounting pressure on governance and financial fronts, all eyes remain on whether the fund can break free from this cycle of dysfunction.

{Source: MoneyWeb}

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