Road Accident Fund Crisis Deepens: Former CEO Defies Parliament as R133 Million Settlement Rocks Insolvent Fund

RAF in Crisis: Parliamentary Inquiry Exposes Widespread Dysfunction

The Road Accident Fund (RAF) finds itself at the center of a deepening crisis as South Africa’s embattled state insurer faces mounting legal challenges, financial insolvency, and governance failures that have prompted a full parliamentary investigation.

Former CEO Collins Letsoalo Defies Parliamentary Summons

In a dramatic turn of events on November 25, 2025, former RAF CEO Collins Letsoalo failed to appear before Parliament’s Standing Committee on Public Accounts (SCOPA) despite being served with a formal subpoena. The no-show has prompted SCOPA chairperson Songezo Zibi to warn that Letsoalo could face criminal charges for defying the parliamentary summons.

“He has shown SCOPA the middle finger,” Zibi stated, highlighting the former CEO’s apparent disregard for parliamentary authority. The inquiry has been unable to locate Letsoalo, with attempts to serve the subpoena failing as addresses he previously used have been abandoned.

R133 Million Court Settlement Deals Major Blow to RAF

Adding to the RAF’s woes, the Supreme Court of Appeal has upheld a massive R133 million settlement for psychiatric injury linked to a 2006 accident. The case, which dates back nearly two decades, involved a woman whose husband died in a road accident.

The RAF had attempted to overturn the settlement by appointing a new US-based psychiatrist who contradicted earlier expert consensus about the woman’s psychiatric injury. However, Acting SCA Judge Daniel Dlodlo dismissed the RAF’s application, stating that the attempt to rely on new expert reports “years into the litigation” did not constitute grounds for reconsideration.

The court found the RAF’s application was “characterised by inexcusable delay, a lack of a full and frank explanation, procedural prejudice to the respondent, and weak prospects of success.”

Executives Award Themselves R6.74 Million in Bonuses Despite Insolvency

Perhaps most shocking is the revelation that RAF executives awarded themselves R6.74 million in performance bonuses during the 2024/25 financial year, with former CEO Collins Letsoalo receiving R2.8 million of this amount. This occurred while the fund faces technical bankruptcy with:

• R10.4 billion in unpaid claims
• Total claims liability of R40.4 billion
• Monthly fuel levy revenue of only R4 billion
• A R27.8 million deficit that has grown over a decade

ActionSA MP Alan Beesley condemned the bonuses as “morally wrong and shocking,” stating: “The RAF is bankrupt and key performance indicators have gone backwards. One must ask how the executives can receive a performance bonus when victims of accidents are receiving very little or nothing at all.”

Financial Mismanagement and Governance Failures

The parliamentary inquiry has uncovered extensive evidence of financial mismanagement, including:

• Excessive personal security spending: R23 million spent on personal security, hotels, and bodyguards from 2023 to 2025
• Procurement irregularities: Nearly R1 billion in procurement outsourced to two external companies without proper oversight
• Accounting policy changes: Major changes affecting 500,000 claimants implemented without board approval
• Claims processing delays: Average processing time of four years
• Undisclosed liabilities: Allegations of R500 billion in hidden liabilities

Board Dissolution and Leadership Crisis

In July 2025, Transport Minister Barbara Creecy dissolved the RAF Board due to persistent dysfunction, with an interim board appointed in August following Letsoalo’s suspension for insubordination. The fund has received adverse or disclaimed audit opinions for five consecutive years.

In early November, the RAF board placed the Acting CEO, CFO, Chief Governance Officer, and Head of the CEO’s Office on precautionary suspension to allow an independent investigation into administrative and governance failures.

Impact on Road Accident Victims

While executives enriched themselves with bonuses, the RAF’s dysfunction has had devastating consequences for road accident victims across South Africa. With claims processing delays averaging four years and the fund’s technical insolvency, thousands of victims and their families continue to wait for compensation they desperately need.

The RAF, funded by a R2.18-per-liter fuel levy that generates over R48 billion annually, was established to provide crucial support to road accident victims. However, the current crisis has undermined its core mission.

Parliamentary Inquiry Continues

SCOPA’s inquiry into the RAF has received over 100 submissions from lawyers, doctors, staff, and victims, painting a picture of an organization in complete dysfunction. The committee continues its investigation into what Zibi describes as “toxic leadership” and possible criminal misconduct.

The inquiry has exposed poor vetting of senior executives with reckless financial histories and a culture of impunity that has allowed mismanagement to flourish unchecked.

Looking Forward

As the RAF crisis deepens, questions remain about the fund’s ability to fulfill its mandate to South African road accident victims. With criminal charges potentially looming for the former CEO and ongoing investigations into financial mismanagement, the road to recovery appears long and uncertain.

The case highlights broader challenges facing South Africa’s state-owned enterprises and the urgent need for accountability and governance reform to restore public trust and ensure these institutions serve their intended purpose.

The Road Accident Fund crisis continues to unfold, with Parliament’s inquiry expected to reveal further details about the extent of mismanagement and dysfunction within this critical state institution.