Road Accident Fund (RAF) CEO Collins Letsoalo is pulling out all the stops to ensure he is not “prejudiced” from contesting reappointment.
He is at loggerheads with RAF board chair Zanele Francois, who accused him of attempting to mislead parliament.
Letsoalo initiated a legal showdown against the fund and RAF board at the Pretoria high court, challenging his suspension by the board on June 3. The urgent application, which took about six hours, was heard on Tuesday by judge Graham Moshoana.
He wants the court to set aside the board’s decision to suspend him and resume his duties. He also wants the court to halt adverts for the CEO post as his term comes to an end on August 6.
In court papers, it was disclosed a day before Letsoalo was suspended that Francois received a letter from Special Investigating Unit (SIU) head Andy Mothibi flagging concerns that the fund spent R4.7bn on default judgments after the termination of a panel of attorneys.
The SIU has been investigating allegations of financial mismanagement and maladministration at the fund since 2022.
Francois said preliminary findings of the SIU detailed that the fund “incurred unnecessary expenditure” on legal costs and paid more than it should have from 2018-2023.
The fund contravened Treasury regulations in its contract with the Government Employees Pension Fund’s corporate panel of attorneys by paying R26m, which “exceeded the delegation of the fund’s CEO”, Francois said.
The SIU found that the CEO might have misled the Treasury in his request to approve a R79m lease for a Johannesburg building with Mowana Properties, against a bid evaluation committee’s recommendation.
Representing Letsoalo, advocate Hlalele Molotsi argued that Francois misled the court. He asked the court to order her to pay legal costs in her personal capacity. The judge, however, had difficulty with the request because Francois was not cited in her personal capacity.
Molotsi argued that Francois misled parliament about the reason for his being placed on special leave on May 27, a day before he was supposed to appear before standing committee on public accounts. The transport department said he was placed on special leave pending SIU investigations.
That was not true, Molotsi contended. Molotsi presented a letter by RAF board member Lekau Nyama that was sent to transport minister Barbara Creecy.
In the letter, Nyama said the board decided to place Letsoalo on compassionate leave to attend to personal matters. Nyama accused the board chair of misleading parliament about the matter.
“The board has experienced an alarming breakdown in governance standards marked by procedural irregularities, unlawful actions and misrepresentation made to oversight bodies such as the standing committee on public accounts,” Nyama’s letter read.
The board withdrew the special leave after legal advice and suspended Letsoalo on June 3 for not attending a parliamentary committee meeting on May 28.
Molotsi said a letter provided to the court by Francois detailing the special leave was a board resolution was fraudulent. “The chair of the board is deliberately misleading the court, bringing the whole board and RAF into disrepute,” he said.
Francois accused Letsoalo of omitting information from the fund’s presentation that was going to be presented to the committee in parliament on May 28.
“The initial presentation reflected that, ‘the current RAF corporate legal panel was appointed in December 2023 and has a total of 43 law firms. Only 19 law firms have since been briefed and paid during 2023 and 2024. A total of R76m in 2023 and R104m in 2024.’ The applicant removed in its entirety the aforementioned explanation,” Francois’s papers read.
Letsoalo denied the allegations and said they were not relevant to the application.
On Tuesday, parliament’s standing committee on public accounts announced it would conduct an inquiry into the state of finances at the RAF, after struggling to get detailed reports.
Molotsi argued the suspension was unlawful because the board did not follow RAF disciplinary policies. The judge, however, questioned whether Letsoalo could be disciplined based on the fund’s policy, which he signed off.
Molotsi said while Letsoalo signed the policy, he could not be exempted from it as he too was an employee of the fund.
Letsoalo also wanted the court to interdict the RAF from advertising his position pending the “finalisation of the process to reappoint” him as the CEO for a second five-year term.
The fund had not yet advertised the post. The judge asked whether the court could interdict something that had not happened.
Molotsi said Letsoalo was concerned he would suffer because of the suspension from contesting the post. He said the advert could be issued “any time” because transport deputy minister Mkhuleko Hlengwa had been “putting pressure” on the board to advertise.
The judge said Molotsi could not advance the argument because they did include Hlengwa in the legal proceedings.
Representing the RAF, advocate Ernst van Graan said Letsoalo had no right to request the court to stop a CEO advert because he had no legal binding document to show the board favoured him for reappointment.
Letsoalo contended the suspension placed his life in danger. Graan said the RAF decided not to withdraw security protection pending suspension and had no plans to.
He argued that Letsoalo had not provided substantial evidence to support that the RAF board acted unlawfully, and therefore the court should dismiss the application.
Judgment in the matter will be delivered next week.
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