Road Accident Fund in Crisis: Suspended Executives Allege Corruption Amid Parliamentary Inquiry (July 2025 Update)

Road Accident Fund in Crisis: Suspended Executives Allege Corruption Amid Parliamentary Inquiry (July 2025 Update)

Date: July 14, 2025

The Road Accident Fund (RAF) in South Africa is once again at the center of controversy following the suspension of its CEO, Collins Letsoalo, and acting Chief Investment Officer, Sefotle Modiba. Both executives claim their suspensions are politically motivated and stem from their efforts to expose deep-seated corruption and mismanagement within the fund.

Executives Suspended for Exposing Corruption?

At a media briefing on July 13, Letsoalo and Modiba alleged that their attempts to reform the RAF and root out fraudulent claims, bribery, and preferential treatment for certain legal firms led to their removal. Letsoalo described the RAF as having been turned into a “looting vehicle” before his tenure, with systemic issues including cherry-picking of claim payments and a lack of transparency in financial reporting.

Modiba highlighted operational risks such as duplicate payments, fraudulent claims, and payments to attorneys who had been suspended or to claimants who were deceased. He claimed that their reforms had saved the fund significant money and reduced its short-term liability, but these efforts upset powerful interests benefiting from the status quo.

Parliamentary Inquiry and Financial Mismanagement

The suspensions come as Parliament’s Standing Committee on Public Accounts (SCOPA) launches a full inquiry into the RAF. The inquiry follows repeated warnings from the Auditor-General about irregular expenditures, procurement failures, and inadequate internal controls. The RAF faces a reported liability of over R320 billion, though Letsoalo disputes this figure, arguing that accounting standards have inflated the fund’s liabilities.

SCOPA chairperson Songezo Zibi has emphasized the need for public accountability, stating that all relevant documents will be made available on the Parliament website. The inquiry aims to address concerns over governance failures, delayed claim payouts, and the overall financial health of the fund.

Allegations Against the Legal Fraternity and Judiciary

Letsoalo went further, accusing elements within the legal fraternity and judiciary of being complicit in the corruption plaguing the RAF. He cited instances where certain law firms received preferential treatment, earning up to R1.2 billion a year from the fund. Letsoalo expressed frustration that his evidence of corruption has been ignored by oversight bodies, and he questioned the impartiality of the judiciary after his urgent court application to be reinstated was dismissed.

Impact on Claimants and the Public

While the RAF’s leadership battles play out, thousands of road accident victims continue to face significant delays in claim payouts. The fund’s operational challenges and ongoing investigations have left many claimants trapped in a convoluted and inefficient system.

What Happens Next?

The coming weeks will be critical for the RAF as the parliamentary inquiry proceeds and suspended executives continue to contest their dismissals. The outcome will have far-reaching implications for the fund’s future, its claimants, and public trust in South Africa’s institutions.

Sources: Daily Maverick (July 13, 2025), IOL (July 13, 2025)