The Road Accident Fund (RAF) board admitted on Tuesday its decision to place CEO Collins Letsoalo on special leave was “not legally sound”.
Briefing parliament’s portfolio committee on transport on the developments at RAF, deputy board chair Nomonde Mabuya-Moloele said the board had resolved in meetings on May 30 and June 2 to rescind its decision on May 27 to place Letsoalo on special leave.
A legal opinion obtained by the board found the decision on Letsoalo not to be legally sound, she said.
Instead, the board resolved to suspend Letsoalo for “insubordination related to his refusal to appear” before a sitting of parliament’s standing committee on public accounts (Scopa) scheduled for May 28.
Business Day reported last week that Letsoalo had been placed on leave pending a Special Investigating Unit (SIU) inquiry into multimillion-rand contracts and tenders at the fund.
The SIU has been investigating RAF management after the entity signed a R79m lease for a Joburg building with Mowana Properties. Letsoalo approved the contract against a bid evaluation committee’s recommendation.
The Sunday Times reported that a preliminary SIU report allegedly “implicated Letsoalo in possible wrongdoing” in the contract.
Transport deputy minister Mkhuleko Hlengwa said he had been advised by the RAF board that it had taken a decision to place Letsoalo on special leave and that Phathutshedzo Lukhwareni would act in his position.
“The situation at RAF is absolutely concerning. We have not been briefed by the SIU as department or ministry,” Hlengwa said.
“I have scheduled a meeting of the board on June 10 to deal with all these issues and other matters of RAF and see what possible actions and interventions must be taken. The RAF will continue to receive the unwavering attention of the minister until … these matters are resolved.”
In her presentation to the committee on Tuesday, Mabuya-Moloele said the board had recommended that the acting chief investment officer Sefotle Modiba be placed on precautionary suspension with full pay and benefits with immediate effect.
“The decision arises from concerns regarding his previous employment by the City of Johannesburg and other matters that are under investigation.”
Mabuya-Moloele said the RAF board had also resolved that the process of filling all vacant executive management positions — chief claims officers, chief investment officer, chief corporate support officer and head of legal services — be prioritised.
“Management was directed to appoint acting officials in the positions of the chief claims officer, chief investment officer, head of legal services and head of people management,” she said.
EFF MP Mazwi Blose said the RAF had been “put in jeopardy by a board that doesn’t seem to know what it’s doing”.
Addressing Mabuya-Moloele, Blose said the board “don’t know what you are doing with this entity and I don’t understand why we shouldn’t even be calling for your own dissolution. You go and put the CEO of the entity on special leave, illegally so. It’s just a mess….”
The RAF is primarily funded by a levy on fuel sales. This charge is added to every litre of petrol and diesel sold throughout SA.
Finance minister Enoch Godongwana announced in his budget speech on May 21 that the general fuel levy would increase on June 4, with the petrol price going up by 16c, from R3.85 to R4.01 a litre, and diesel by 15c, from R3.70 to R3.85 a litre.
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