RAF crisis deepens: CEO suspended amid corruption scandal, OUTA demands expert overhaul to save collapsing fund

Key topics: OUTA slams RAF board for ignoring repeated warningsLegal firms pocket millions while victims remain uncompensatedZibi reveals missing key roles, unqualified legal head.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.The auditorium doors will open for BNIC#2 on 10 September 2025 in Hermanus. For more information and tickets, click here..By Kerry Lanaghan.The Road Accident Fund (RAF), once a vital public institution designed to assist South African road accident victims, is now the epicentre of a sprawling governance crisis. The recent decision to place CEO Collins Letsoalo on special leave, following years of mounting allegations of corruption, mismanagement and financial irregularities, marks a pivotal moment in a saga that civil society has long warned about.The Organisation Undoing Tax Abuse (OUTA) has welcomed the move, calling it “embarrassingly overdue.” Letsoalo’s tenure has been marred by scandals, including a R79 million lease deal flagged by the Special Investigating Unit, R362 million in irregular expenditure under Project Siyenza, and unauthorised payments totalling R140 million. OUTA has repeatedly warned that under his leadership, the RAF spiralled further into dysfunction, with liabilities ballooning beyond R314 billion and victims waiting years for compensation.In an interview with BizNews, OUTA CEO Wayne Duvenage condemned not only Letsoalo’s conduct but also the RAF board’s failure to act earlier. “The board has had sight of these issues for years and failed to conduct independent investigations or hold Letsoalo accountable,” he said. Duvenage added that whistleblowers and purged staff had raised alarms about illegal contract extensions, inflated legal fees, and unqualified appointments long before external agencies stepped in.“The institution is broken,” Duvenage stated. “What’s required now is appointing an expert board and leadership team, preferably with experience in insurance and risk management, who can prioritise operational efficiency and restore trust.”Letsoalo's prior dismissal from PRASA, followed by his RAF appointment, raises broader questions about executive vetting and political accountability. “This speaks to a deeper rot within government’s appointment processes,” Duvenage said, referencing a culture of political deployment that places loyalty above competence. He warned that unless the state stops appointing politically connected individuals to crucial roles, entities like the RAF will continue to collapse under the weight of corruption and mismanagement.This sentiment is echoed by Rivonia Circle leader Songezo Zibi, who has been tracking irregularities in the RAF’s legal expenditure. Zibi revealed in a recent X thread that two law firms received R84 million out of the RAF’s R104 million legal budget in 2024/25 - an outrageous concentration of state legal work. Despite repeated requests since November 2023, the RAF only disclosed this information when compelled during a parliamentary session.“The legal profession has been milking the RAF dry for a very long time,” Zibi noted, promising further investigation. He confirmed that the Legal Practice Council will soon appear before Parliament’s Standing Committee on Public Accounts (SCOPA) to explain how it plans to crack down on law firms implicated in profiteering. Zibi stated in another post on X that “the person acting as Head of Legal - for over 2 years - at the RAF doesn’t have a law degree. There is also no Chief Claims Officer, one of the most critical functions at the RAF. “The RAF’s case is now emblematic of a broader systemic failure in state oversight. Duvenage points out that similar dysfunction plagues other entities under the Department of Transport, including the driver’s license card system and SANRAL. He credited current Transport Minister Barbara Creecy for showing initial signs of confronting the crisis. Still, he warned that real change would require a “zero-tolerance approach” to maladministration and political interference.Both OUTA and Zibi are calling for stronger parliamentary oversight, professional board appointments, and swift legal consequences for those involved in wrongdoing. “People who are deeply implicated in corruption are walking the corridors of these institutions every day, and nothing happens,” said Duvenage.The big question now is whether this moment will mark a true turning point for the RAF or whether it will become just another case study in South Africa’s deepening crisis of accountability. Civil society has done its part, and the ball is now firmly in the government’s court.

RAF crisis deepens: CEO suspended amid corruption scandal, OUTA demands expert overhaul to save collapsing fund

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