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The Citizen
09-06-2025
- Business
- The Citizen
State capture allegations come back to haunt RAF acting CIO
While RAF CEO launches legal bid to overturn his own suspension. It is not certain that the RAF board realises that the primary purpose of the fund is to 'compensate victims timeously'. Picture: Shutterstock The Road Accident Fund (RAF) board placed its acting chief investment officer (CIO) Sefotle Modiba on precautionary suspension following allegations that parliament's Standing Committee on Public Accounts (Scopa) was given misinformation about Modiba's departure from the City of Johannesburg (CoJ). It has also emerged that RAF CEO Collins Letsoalo has lodged an urgent high court application to review and set aside last week's decision by the fund's board to suspend him with immediate effect for insubordination for defying a board instruction for him to attend a Scopa meeting on 28 May. Letsoalo is alleging the decision is unlawful, irrational, and unreasonable and is requesting the court to order his immediate reinstatement as RAF CEO. The application is scheduled to be heard next week. RAF board deputy chair Dr Nomonde Mabuya-Moloele confirmed to parliament's Portfolio Committee on Transport last week that the RAF board had recommended at a special meeting tonight to rescind a decision to place Letsoalo on special leave and to then place him on suspension. Mabuya-Moloele further confirmed that Modiba had been placed on precautionary suspension with full pay and benefits with immediate effect. This is due to concerns regarding Modiba's previous employment at the CoJ and other matters that are currently under investigation. ALSO READ: RAF CEO placed on special leave with full pay, as MPs grill fund Charges 'were dropped' say Modiba's attorneys Scopa member Patrick Atkinson of the DA said during last month's Scopa meeting that a letter was sent to the committee by Vuyo Manisi Inc Attorneys on behalf of Modiba stating that: The CoJ decided to withdraw all charges of misconduct against Modiba; There was a mutual separation agreement between the CoJ and Modiba; and All of what is stated in the letter is well documented and backed up by concrete evidence that their client, Modiba, did not leave the CoJ with any charges hanging over his head. Atkinson said the letter further stated that Modiba feels aggrieved because of comments made by Scopa chair Songezo Zibi on a matter that had already been finalised and is inaccurate. He said the letter urged Scopa to refrain from 'using false information' and committee members not 'to entertain wrong information concerning their client's [Modiba] departure from the CoJ'. ALSO READ: R25.5 billion deficit over five years — Can RAF afford to pay out claims? Charges against Modiba 'were not dropped' – CoJ Atkinson said the reality is that Scopa sought information from the CoJ and he would like to state the facts of the response it received from the CoJ. He said with regard to the claim that the charges against Modiba were dropped because the CoJ no longer believed he had a case to answer, the CoJ said: 'According to our records, the charges against Mr Modiba were not dropped. He resigned during the disciplinary process.' Atkinson said the second question from Scopa to the CoJ was whether there was a mutual separation agreement as part of the settlement when Modiba resigned and had the charges dropped. Atkinson replied that the CoJ said: 'No, there was no mutual separation between Mr Modiba and the CoJ. 'There was a proposal for mutual separation from his [legal] representative, which proposal was rejected by the CoJ representatives. Subsequently, the employer resigned and left of his own volition.' ALSO READ: Expert accuses RAF of misrepresenting itself and its purpose 'We have been lied to again' – Scopa Atkinson said the CoJ was further asked if Modiba resigned of his own accord before the disciplinary inquiry could proceed – and since he was no longer an employee there was no longer a reason to pursue the matter any further? He replied that the CoJ said: 'Mr Modiba resigned during the disciplinary process when the parties could not reach any consensus on mutual separation.' Atkinson said the issue Scopa has, which is extremely serious, is that 'we have been lied to again'. 'Mr Modiba instructed a lawyer to send us a letter with falsehoods and lies,' he added. 'Now, I think the situation here is that certainly the [RAF] board needs to speak to Mr Modiba and see whether you want to continue to employ him on the basis of a lawyer's letter sent to Scopa which does not attest to the information we received from the CoJ,' he said. Atkinson also requested Scopa to report Modiba's attorney to the Legal Practice Council. 'In essence, a lie has been sent to this committee under a lawyer's letter under the full knowledge of Mr Modiba and his attorney,' he said. 'So we would ask that that attorney be reported to the Legal Professional [Practice] Council and that [the] letter be subject to an investigation.' ALSO READ: RAF management muzzled employees during investigations, SIU says The R2.6bn that left CoJ's coffers During the Scopa meeting with the RAF in March, Scopa chair Zibi referred to the fact that Modiba had reportedly left the CoJ after facing disciplinary charges related to the withdrawal of R2.6 billion. He said these funds were later linked to Regiments Capital, a firm cited during the Zondo Commission of Inquiry into Allegations of State Capture. Zibi pointed out in last month's Scopa meeting that he had asked the RAF for information about Modiba in October 2024 – and with a simple email that took four minutes the committee to draft, it received the response from the CoJ that Atkinson had mentioned. 'The [RAF] board is failing,' said Zibi. 'Vacancies in critical positions, litigation without a head of legal, people in positions who are still trying to find their feet, lawyers who rock up in court to try and overturn a matter and they don't argue it, inability to send a simple email to a previous employer to ask about the appropriateness of an employee, who then proceeds to send a lawyer's letter that is suspect at best. 'This situation cannot continue any longer. It's making a mockery of parliament and its oversight.' ALSO READ: WATCH: Letsoalo denies misleading Scopa on RAF's state of affairs Transport department to report on action being taken Zibi asked Deputy Minister of Transport Mkhuleko Hlengwa, when he next reports to parliament about the RAF, to report on what is being done to remedy this situation. Hlengwa told the Portfolio Committee on Transport last week that he would be having a meeting with the RAF board this week (the week starting 9 June) on a number of issues. The Department of Transport stated on Friday that this meeting 'will evaluate the prospects of the current board to restore good governance and effective administration at the entity so that it fulfills its primary purpose of compensating road accident victims timeously'. 'The department will consider appropriate interventions post this meeting to ensure the stability of the entity, good governance, and the fulfilment of its mandate.' This article was republished from Moneyweb. Read the original here.
The Citizen
29-05-2025
- Business
- The Citizen
RAF ‘deliberately withholding' information from Scopa
The SIU tells us that one law firm has received an incredibly disproportionate portion of the work allocated by the RAF – Scopa chair. What is the RAF hiding, and why does its R1.2m-a-year chair not think it 'important enough' to make sure Scopa is given the information it asked for? Picture: Moneyweb The Road Accident Fund (RAF) has been accused of deliberately withholding information from Parliament's Standing Committee on Public Accounts (Scopa) about the top 10 law firms to receive briefs and payments from the fund. Scopa chair Songeza Zibi said on Wednesday he has asked for this information twice, the first time on 6 November 2024. He now believes 'this information is being deliberately withheld from the committee for improper reasons'. 'In the intervening period, the SIU [Special Investigating Unit] came to brief the committee and one of the things that they told us is that one of the law firms has received an incredibly disproportionate portion of the work allocated by the RAF. 'We do not know who that law firm is but you can see why that information is pertinent.' He said he cannot understand 'why it is easy to provide the plaintiff information but it seems impossible to provide the corporate legal services information' when the committee has asked for it in writing and in the sitting. Zibi said one of the things he is concerned about is that there are names of law firms that appear on both the lists. ALSO READ: RAF CEO placed on special leave with full pay, as MPs grill fund What does the RAF chair say? RAF chair Lorraine Francois apologised for the information not being provided and assured the committee it will be provided. Zibi said his difficulty is that Francois was in the meeting and knew Scopa asked for this information, which has not been provided. Zibi said it would not be unfair to hold Francois responsible for the failure to provide this information because the board is the accounting authority. Francois said the RAF board secretary takes note of Scopa's requirements but they always assume that it is the responsibility of the RAF CEO and executive to put this information together. Controversial RAF CEO Collins Letsoalo was placed on special leave with full pay and benefits by the board on Tuesday as a precautionary measure, but it was stated that this did not constitute disciplinary action. ALSO READ: R25.5 billion deficit over five years — Can RAF afford to pay out claims? Francois said most of the time, the information requested gets submitted directly to Scopa. 'We are a non-executive board so we don't review everything that comes here directly. 'That is the responsibility of the executive. Now I take full accountability and will ensure this happens. But to respect the request of this committee, I will now get to that level to make sure we will provide this information,' she said. Scopa member Mark Burke of the DA took issue with her answer and asked her what her annual compensation is. Francois said it is about R1.2 million. 'You get paid R1.2 million, which is the equivalent of a parliamentary salary and in your mind it's too operational for you to respond to the [request] for information,' said Burke. 'That [it] is beyond the scope of your work. Does that seem reasonable to you?' Zibi said he would answer this question. 'You [Francois] didn't think it was important enough because I have raised it twice and you simply didn't bother to check. 'We are not asking you to be operational. I am asking you to ensure that the needs of the committee are met by way of information,' he said. ALSO READ: RAF national crisis demands urgent action – expert 'Terminate the board immediately' Scopa member Alan Beesley of ActionSA followed up by stating that he found Francois's response dumbfounding. 'I saw the list that [Zibi] asked for. It's not an extensive list,' said Beesley. He requested that Deputy Minister of Transport Mkhuleko Hlengwa write letters of termination immediately to the RAF board because it is acting with immunity at the moment and treating parliament with disrespect, which is totally unacceptable. Acting RAF CEO Phathutshedzo Lukhwareni said a panel of 43 law firms was appointed by the RAF in December 2023, but only 19 were briefed and paid during the 2023 and 2024 financial years 'at the time of preparing the report'. Lukhwareni said a total R6 million was paid to these law firms in 2023, and around R104 million in 2024. He said it is a panel (of law firms) and obviously the selection takes place depending on the complexity of the matter. ALSO READ: RAF at risk of imploding No state security clearance Scopa was also told that not a single member of the RAF's board or senior executive has a security clearance from the State Security Agency (SSA). Lukhwareni said all the forms have been submitted to the SSA for the vetting process and interviews have been held with some of the executives but 'from here on it's beyond our control from a RAF perspective and SSA is responsible'. Zibi said something does not match because on 16 October 2024 he had an exchange with Francois about the vetting of officials and one official, Letsoalo, was said to be vetted. Zibi pointed out that Letsoalo said in March 2025 that he had been vetted – and the difference between what he said then and the state of affairs now 'means for the second time he lied to the committee'. 'I asked him about the treasurer at the RAF and he [also] lied about that.' Scopa member Patrick Atkinson of the DA said Letsoalo – who was initially acting CEO of the RAF and has now been CEO for five years – has been without a security clearance for seven years. Atkinson said the problem with that is that (without clearance) Letsoalo has not been legally appointed to that position and the question then is how would he have the authority to take the legal action he has against the Auditor-General (AG). ALSO READ: Expert accuses RAF of misrepresenting itself and its purpose The RAF unsuccessfully applied to review and set aside the AG's disclaimer of the fund's 2020/2021 annual financial results and to declare the disclaimer invalid and unlawful. The AG issued the disclaimer because the RAF used an accounting standard it was not permitted to use. 'I understand the court might give him six months to get his security clearance but not seven years,' Atkinson said. 'If he has been operating for seven years without a security clearance, it raises a massive legal issue about a whole variety [of issues] about the accounting principles, not paying out medical aids and foreigners and a whole variety of board minutes which are illegal.' Zibi said he would have to take legal advice on that and would not hold the Department of Transport or RAF responsible for the tardiness of the SSA. He said Scopa will take that up with the responsible minister, but the committee needs to work out if Scopa was misled when the CEO told the committee that he had been vetted. This article was republished from Moneyweb. Read the original here.
