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The transport ministry said the board had undermined the RAF's ability to execute its mandate.
Transport Minister Barbara Creecy. Picture: GCIS
Minister of Transport Barbara Creecy has dissolved the board of the embattled Road Accident Fund (RAF).
The ministry said on Tuesday said the move follows persistent governance and operational challenges that have beset the RAF and significantly undermined its ability to discharge its statutory mandate.
Suspension
At the weekend, suspended officials at the RAF, CEO Collins Letsoalo and the chief investment officer Sefotle Modiba, briefed the media, claiming their suspensions are linked to efforts to improve the fund’s operations.
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Letsoalo was suspended last month for insubordination for his alleged failure to attend a Scopa meeting.
Modiba was placed on precautionary suspension due to concerns regarding his previous employment at the City of Johannesburg and other matters currently under investigation.
RAF board dissolved
Creecy’s spokesperson, Collen Msibi, said that this has led to a loss of confidence in the board’s ability to manage the RAF effectively.
Msibi said the protracted and costly litigation pursued by the RAF, based on the application of accounting standards, has resulted in further strain on the entity’s financial resources and capacity.
“The inconsistent and, at times, reckless handling of the suspension of the Chief Executive Officer attracted a legal challenge and institutional uncertainty. The frequent incurrence of default judgments against the RAF exacerbates its contingent liabilities and weakens its financial sustainability
“The failure by the Board to fill at least two critical executive positions, which are critical to the mandate of the Fund, namely, Chief Claims Officer and Head of Legal. This has resulted in the loss of confidence in the board’s ability to run the entity effectively,” Msibi said.
RAF commitment
Msibi said Creecy has reiterated the department’s commitment to continue to pursue all necessary measures to restore institutional stability and enhance the RAF’s capacity to fulfil its statutory obligations to road accident victims.
He added that Creecy further emphasised the department’s intent to finalise the Road Accident Benefit Scheme Bill, which will introduce a no-fault system to make it easier for road accident victims to access the benefits without costly legal bills.
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