RAF Crisis Deepens: R500 Billion Liabilities Hole and Secret Bank Accounts Exposed in 2025

Major Developments Rock South Africa’s Road Accident Fund

The Road Accident Fund (RAF) crisis has reached unprecedented levels in October 2025, with shocking revelations emerging from parliamentary inquiries and investigations. From secret bank accounts containing millions to a staggering R500 billion in hidden liabilities, the state-owned compensation fund faces its most severe crisis since inception.

SIU Uncovers R50 Million in Secret RAF Bank Accounts

The Special Investigating Unit (SIU) has made alarming discoveries during its investigation into the RAF, revealing the existence of alternative bank accounts containing R50 million that the fund allegedly used to shield money from legal attachments.

According to SIU chief national investigations officer Zodwa Xesibe, who testified before the Standing Committee on Public Accounts (SCOPA), these secret accounts at Investec ranged from R1 million to R100 million. The SIU has initiated criminal referrals related to R30 million that was diverted from the RAF into personal bank accounts of various individuals.

Key SIU Findings Include:

• R50 million discovered in alternative RAF bank accounts
• Criminal referrals for R30 million diverted to personal accounts
• Evidence of family members of RAF executives receiving payments from panel law firms
• R340 million in duplicate payments to 102 law firms due to poor record management
• R70.95 million in signed acknowledgments of debt from legal practitioners

ActionSA Reveals Shocking R500 Billion Liabilities Hole

In a bombshell revelation on October 13, 2025, ActionSA exposed that the RAF has unrecorded liabilities exceeding R500 billion – nearly one-fifth of the national government’s entire annual budget. This represents one of the most serious financial misstatements by any state entity in democratic South Africa.

ActionSA Member of Parliament Alan Beesley revealed that this massive hole was created through two primary mechanisms:

1. Unauthorized Accounting Standards

The RAF deliberately applied non-compliant accounting standards, reducing recorded liabilities from R330 billion to just R27 billion in 2020 – effectively erasing R300 billion in obligations (R386.7 billion when adjusted for inflation to 2025).

2. Mass Claim Rejections

Through the introduction of RAF New Form 1, the fund has systematically rejected legitimate claims. Between July 2022 and March 2025:

• 105,039 claims were pre-assessed
• 75,990 claims (72%) were rejected as “non-compliant”
• Annual claim registrations dropped from 300,000 in 2021 to under 100,000 subsequently
• Estimated value of unprocessed claims: R121.8 billion

SCOPA Inquiry Exposes Governance Failures

The parliamentary inquiry has revealed systemic governance failures at the RAF, including:

Board and Management Failures:

• RAF board failing to exercise fiduciary duties
• Critical financial decisions approved without proper risk assessment
• Tendency to rubber-stamp management proposals
• Dysfunctional audit and risk committees
• Weak reporting lines and inadequate escalation procedures

Investment Irregularities:

The RAF held billions in unspecified investment accounts, potentially breaching Treasury rules requiring investments to be lodged with the Corporation for Public Deposits. This strategy boosted investment income to R677 million while accident victims waited for compensation.

Former CEO Collins Letsoalo Under Investigation

Former RAF CEO Collins Letsoalo remains under SIU investigation, with his right of reply process stalled since June 2024. The SIU has faced interference in its investigation, including:

• RAF employees being instructed to channel responses through the CEO’s office
• Non-cooperation from RAF liaison personnel
• Criminal cases opened against obstructive RAF executives

Impact on Road Accident Victims

While the RAF engages in financial manipulation and mismanagement, genuine road accident victims continue to suffer. The fund’s structural insolvency and decades-old backlogs mean that those most in need of compensation face prolonged delays and uncertainty.

The crisis has created an environment where:

• Legitimate claims are systematically rejected
• Court rolls are clogged with unpaid claims
• Victims resort to legal action to secure compensation
• The fund’s true financial position remains obscured

Calls for Accountability

ActionSA has called for the former RAF Board of Executives to be charged with dereliction of duty, while demanding that the Ministers of Finance and Transport account for how this crisis was allowed to escalate under their oversight.

The SIU has made referrals to the Legal Practice Council regarding misconduct by certain legal firms, while criminal investigations continue into the misappropriation of funds.

Looking Forward: Reform Urgently Needed

The RAF crisis represents a fundamental failure of governance, oversight, and accountability in South Africa’s state-owned entities. With Transport Minister Barbara Creecy having dissolved the RAF board in July 2025, urgent reforms are needed to:

• Implement proper financial controls and transparency
• Restore lawful claim registration processes
• Apply compliant accounting standards
• Ensure adequate oversight and governance
• Prioritize compensation for legitimate claimants

Conclusion

The RAF crisis of 2025 represents one of the most serious financial scandals in post-apartheid South Africa. With R500 billion in hidden liabilities, secret bank accounts, and systematic governance failures, the fund requires immediate intervention to restore its mandate of compensating road accident victims.

As investigations continue and accountability measures are pursued, South Africans must grapple with the reality that ordinary taxpayers will ultimately bear the cost of this financial mismanagement through higher fuel levies and taxes.

The coming months will be crucial in determining whether the RAF can be reformed and restored to fulfill its critical social mandate, or whether more drastic measures will be required to address this unprecedented crisis.