Road Accident Fund CEO placed on special leave amid corruption investigation

Collins Letsoalo, the CEO of the Road Accident Fund (RAF), has been placed on special leave as a precautionary measure while an ongoing investigation by the Special Investigating Unit (SIU) investigates a controversial R79 million lease deal for the RAF’s Johannesburg office.

This significant development was disclosed by Transport Deputy Minister Mkhuleko Hlengwa during a Standing Committee on Public Accounts meeting, where RAF officials were expected to provide an update on the SIU investigation.

The SIU was scrutinising the RAF for allegations of corruption and maladministration, with Letsoalo at the heart of the inquiries.

Accusations against him include alleged interference in procurement processes, notably overturning a bid committee's favourable decision for property management company Mowana Properties, which led to the securing of the lucrative lease contract. 

The SIU's preliminary report indicates a pattern of financial mismanagement under Letsoalo's leadership, extending beyond the lease to include irregularities in a R19 million cleaning and security contract improperly extended over six years, and a R313 million backlog project awarded with inflated costs.

During the meeting, Hlengwa emphasised the board's commitment to good governance, stating that Letsoalo's special leave should not be viewed as disciplinary action.

"This decision was taken solely in the interest of good governance," he underscored, explaining that it aligned with the Road Accident Fund Act and the principles of the Public Finance Management Act. 

The board's fiduciary responsibilities guided their decision, promising that the special leave would remain in effect until the SIU concludes its investigation.

At the same time, the Department of Transport expressed full support for the RAF board's decision.

Hlengwa clarified that while the SIU's preliminary report was in the possession of the Standing Committee on Public Accounts, the Transport Ministry has not been officially briefed on the investigation's details.

"The department is aware of the investigation but remains unclear about the outcomes," Hlengwa acknowledged during the session.

He further stressed the expectation that the RAF would fully cooperate with the ongoing investigation until its conclusion, adding that the board had given due consideration to all pertinent matters impacting their decision.

RAF board chairperson Zanele Francois reinforced the gravity of the allegations against Letsoalo, articulating a firm belief that he must be distanced from the ongoing investigation to maintain the integrity of the organisation.

"We felt it was necessary to give him time off to address personal conflicts related to this process," she explained, highlighting the board's commitment to transparency and accountability.

As the investigation proceeds in its final stages, Phathutshdzu Lukhwareni has been appointed as the acting CEO to ensure operational continuity while Letsoalo is on leave.

The board is expected to review the situation monthly and communicate updates as the inquiry develops.

RAF spokesperson Linda Rulashe mentioned that an official statement regarding the situation would be forthcoming. Meanwhile, Letsoalo declined to comment further when approached by the media, opting to refrain from discussing the allegations publicly.

DAILY NEWS