Road Accident Fund Crisis Deepens: Executive Suspensions and Legal Battles Plague South Africa’s Troubled Entity

South Africa’s Road Accident Fund (RAF) continues to face unprecedented challenges as 2025 draws to a close, with a series of executive suspensions, ongoing legal battles, and mounting governance concerns casting doubt over the entity’s ability to fulfill its mandate of compensating road accident victims.

Executive Suspensions Rock RAF Leadership

In a dramatic turn of events, Transport Minister Barbara Creecy has defended the precautionary suspension of four top RAF executives, including the acting CEO and Chief Financial Officer (CFO). The suspensions, implemented in November 2025, came amid serious allegations of financial misconduct that were brought to the attention of the RAF’s interim board.

The suspended executives include:

• Acting Chief Executive Officer
• Chief Financial Officer
• Chief Governance Officer
• Head of the Office of the CEO

Minister Creecy emphasized that these precautionary measures were implemented “not as a punitive action, but as a governance necessity” to restore stability and accountability within the RAF’s financial governance environment. The interim board exercised its statutory powers under the Public Finance Management Act (PFMA) to address various allegations of financial misconduct.

Collins Letsoalo’s Legal Battles Continue to Haunt RAF

Despite former CEO Collins Letsoalo’s departure from the RAF earlier in 2025, his controversial tenure continues to generate legal complications for the fund. The latest case involves former RAF senior IT advisor Mothusi Lukhele, who was dismissed in November 2021 just three months into his three-year contract.

The Supreme Court of Appeal recently dismissed an application by Letsoalo and the RAF to reconsider a court ruling that had suspended Lukhele’s dismissal. The court ruled that any order regarding Lukhele’s contract would have no practical effect, as his contract had already expired in July 2024.

The case highlights the complex web of legal disputes stemming from Letsoalo’s leadership, including issues related to:

• Cyber-attacks on RAF systems
• Employment contract disputes
• Security clearance requirements
• Allegations of dishonesty in employment processes

Parliamentary Oversight and SCOPA Inquiry

The Standing Committee on Public Accounts (SCOPA) has launched a comprehensive inquiry into the RAF’s financial matters, examining the entity’s R48 billion in liabilities and widespread allegations of mismanagement. The parliamentary inquiry has uncovered what officials describe as “a complex web of mismanagement and maladministration” that has been ongoing for over a decade.

Key areas of parliamentary concern include:

• Financial statement irregularities
• Unauthorized changes to accounting policies
• Understated claims liabilities
• Governance failures at board level

Board Dissolution and Restructuring

In July 2025, Minister Creecy took the unprecedented step of dissolving the RAF Board of Directors, citing the need for accountability following numerous governance failures. The dissolution was described as “a measure to ensure accountability for the transgression of fiduciary duties.”

An interim board was subsequently appointed to stabilize the organization and implement necessary reforms. The new board has been tasked with:

• Developing appropriate accounting policies in accordance with GRAP reporting framework
• Engaging with the Accountant General at National Treasury
• Pursuing remedies to hold previous boards accountable
• Restoring financial governance and transparency

Auditor-General’s Disclaimer and Accounting Controversies

The RAF’s financial reporting has been under intense scrutiny since Auditor-General Tsakani Maluleke issued a disclaimer of audit opinion in December 2021. This action was triggered by the RAF’s unauthorized change to its accounting policy without permission from the Accounting Standards Board, resulting in understated claims liabilities and expenditure.

The accounting policy changes led to litigation between the RAF and the Auditor-General, which Minister Creecy has repeatedly urged the fund to withdraw, calling the situation a “horror show.”

Road Accident Benefit Scheme Bill: A New Direction

In response to the RAF’s ongoing challenges, the Department of Transport is reintroducing the Road Accident Benefit Scheme Bill. This legislation aims to transform the current fault-based compensation system into a no-fault social benefit scheme.

Key features of the proposed new system include:

• No-fault compensation regime for claimants
• Reclassification as a social benefit scheme
• Elimination of the need to prove fault in claims
• Improved financial sustainability

Minister Creecy stated that “the current dispensation is unaffordable due to the process of proving fault in settling the claims of damages,” making the transition to a no-fault system essential for the fund’s financial stability.

Operational Changes and Festive Season Safety

Despite the governance challenges, the RAF continues its operational activities. The fund recently announced the relocation of its head office from Centurion to Hatfield in Tshwane, effective January 5, 2026, with all services to be available at the new location.

During the festive season, the RAF has maintained its public awareness campaigns, urging road users to exercise caution. The fund’s media statements highlight the ongoing tragedy of road accidents, with more than 1,502 people dying in road accidents during the 2024-2025 festive season alone.

Claims About Foreign Nationals Debunked

Recent investigations by Africa Check have examined claims that foreign nationals are “bleeding the RAF dry.” The fact-checking organization found that while the RAF paid out R18 billion to non-citizens from 2019/20 to 2023/24, there is no evidence supporting claims that this represents an excessive drain on the fund’s resources.

Looking Ahead: Challenges and Opportunities

As 2025 concludes, the RAF faces several critical challenges:

Immediate Priorities:

• Completing investigations into financial misconduct allegations
• Implementing robust governance structures
• Resolving outstanding legal disputes
• Restoring stakeholder confidence

Long-term Reforms:

• Transitioning to the Road Accident Benefit Scheme
• Implementing sustainable financial management practices
• Improving claims processing efficiency
• Enhancing transparency and accountability

Conclusion

The Road Accident Fund’s current crisis represents one of the most significant governance challenges facing a South African state-owned entity. With executive suspensions, ongoing legal battles, and parliamentary oversight intensifying, the path to recovery will require sustained political will, comprehensive reforms, and a commitment to serving road accident victims effectively.

The proposed transition to a no-fault compensation system offers hope for a more sustainable future, but success will depend on effective implementation and continued oversight. As South Africa grapples with high road accident fatality rates, ensuring the RAF’s stability and effectiveness remains crucial for protecting vulnerable road users and their families.

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