Suspended Road Accident Fund boss tight-lipped over allegations of interference

ALLEGATIONS of possible interference by executives and staff  in an investigation into a controversial R79 million lease deal led to the suspension of Road Accident Fund's chief executive officer Collins Letsoalo, says the fund.  

Letsoalo, whose term expires in August, will still receive his salary and other benefits.

The Special Investigations Unit (SIU) is currently investigating the RAF for alleged corruption and maladministration. 

Letsoalo has been implicated in several allegations of financial mismanagement and corruption, primarily centered around a controversial R79 million lease deal for the RAF’s office in Johannesburg. 

The SIU preliminary report alleges that Letsoalo interfered with the procurement processes by overturning the bid committee’s decision to favour property management company Mowana Properties, which ultimately secured the contract.

The allegations were extended beyond the lease to include irregularities in other RAF contracts such as a R19m cleaning and security contract that was irregularly extended over six years, as well as R313m backlog project that was unlawfully awarded with inflated costs. 

Transport Deputy Minister Mkhuleko Hlengwa said the decision against Letsoalo was taken by the RAF board during a meeting. 

Hlengwa announced the suspension during a Standing Committee on Public Accounts meeting on Wednesday, where the RAF was expected to give an update on the SIU investigation.  

Hlengwa said this was a precautionary measure and did not constitute disciplinary action.  

He said the board exercised its fiduciary duties in terms of the Road Accident Fund Act, 56 of 1996, the Public Finance Management Act, 1 of 1999, and in alignment with the principles of good governance as set out in King IV.

Hlengwa added that the decisions did not imply any prejudgement or adverse finding against Letsoalo. 

“The special leave arrangement will remain in place until the conclusion of the relevant investigations by the SIU, or such earlier date as the board may determine. The board will review the situation on a monthly basis and communicate the updates,” said Hlongwa. 

He said that during this period, Phathutshdzu Lukhwareni will serve as acting CEO to ensure operational continuity. 

Hlengwa added that, as the shareholder, the Department of Transport Ministry supports the decision that the RAF board has taken and believes it was in the collective interests of the investigation, particularly as it is in the final stages. 

Scopa is in possession of the SIU’s preliminary report. 

He said the Transport Ministry has not been briefed by the SIU on matters related to the investigation. 

“We do not have the opportunity to engage the SIU either and therefore we do not have the benefits of the committee’s perspective on matters related to the investigation, " said Hlengwa. 

RAF board chairperson, Zanele Francois, said alleged  interference by executives and staff was the reason the board believes Letsoalo must be placed on special leave.

“The board is taking this very seriously, which is why we believe Mr Letsoalo must be distanced from the process while it runs its course,” she said.

“We felt it was necessary to give him time off to address personal conflicts related to this process, to reflect on his role, and to ensure the organisation is not brought into disrepute. The board also needs to show its support for parliamentary oversight structures,” she said, adding that the board was in communication with the SIU and would meet the unit in June as part of the ongoing investigation.

Cape Times