Minister Creecy Dissolves Road Accident Fund Board Amid ‘Persistent Governance Challenges’

Pretoria – Transport Minister Barbara Creecy has dissolved the Board of Directors of the Road Accident Fund (RAF).

“The transfer follows persistent governance and operational challenges which have beset the RAF and considerably undermined its potential to discharge its statutory mandate,” mentioned the Department of Transport in an announcement made out there to The Bulrushes on Tuesday, 15 July 2025.

Earlier this 12 months, in June, the RAF Chief Executive Officer, Collins Letsoalo, was suspended to facilitate ongoing investigations into potential corruption.

RELATED: Graft Probe: Road Accident Fund CEO Collins Letsoalo Suspended – The Bulrushes

Letsoalo denies the allegations and as an alternative claims his suspension was a part of a broader conspiracy to cease him from disrupting a long-standing “authorized gravy prepare”.

However, the division mentioned the notable governance challenges and considerations that had been additional confirmed by inside oversight and regulatory engagements embody:

• The protracted and dear litigation pursued by the RAF on the appliance of accounting requirements has resulted in additional pressure on the entity’s monetary assets and capability.
• The inconsistent and, at instances, reckless dealing with of the suspension of the Chief Executive Officer attracted a authorized problem and institutional uncertainty.
• The frequent incurrence of default judgments towards the RAF exacerbates its contingent liabilities and weakens its monetary sustainability.
• Deep divisions inside the Board itself, evidenced by most resolutions being handed by the usage of casting votes, fairly than consensus, replicate an absence of cohesion in crucial decision-making processes.
• The failure by the Board to fill at the least two crucial government positions, that are crucial to the mandate of the Fund, particularly the Chief Claims Officer and the Head of Legal.

“This has resulted within the lack of confidence within the board’s potential to run the entity successfully,” the division mentioned.

In response to those developments, Minister Creecy has exercised her powers as an Executive Authority by endeavor the next interventions to safeguard the integrity of the establishment and guarantee continuity of operations:

1. Notice of Intention to Dissolve the Board: On 5 June 2025, the Minister issued letters to the eleven members of the RAF Board, affording them the chance to make representations concerning her intention to dissolve the Board because of their failure to discharge their fiduciary duties successfully. The representations had been acquired and have been duly thought of.  Consequently, the board has been dissolved
2. Request to the National Treasury to nominate an Accounting Authority on phrases of Section 49(3) of the PFMA: A submission has been ready requesting the Minister of Finance to nominate an interim functionary as Accounting Authority in accordance with the Public Finance Management Act. The proposed appointment is meant to forestall a governance vacuum whereas a brand new Board is being constituted.
3. Initiation of a Recruitment Process: A draft public commercial has been ready to start the method of appointing a brand new Board, guaranteeing clear and merit-based choice consistent with relevant laws.
4. Establishment of an Expert Advisory Committee: To assist the event of a sustainable operational and governance mannequin, the minister has initiated the appointment of a panel of unbiased specialists to assessment the RAF’s enterprise processes and suggest actionable suggestions. Members of the panel can be introduced sooner or later.
5. Furthermore, a request has been made to the SIU to determine if the present investigation underneath Proclamation 44 of 2024 covers the occasions of the final three months and if not, formally request the growth of the scope to cowl these occasions. The response from the SIU on this regard is eagerly awaited.

“Minister Creecy has reiterated her division’s dedication to proceed to pursue all needed measures to revive institutional stability and improve the RAF’s capability to fulfil its statutory obligations to the general public and guarantee a speedy and equitable entry to the Road Accident Benefit Scheme by the street accident victims,” the assertion mentioned.

“She additional emphasised her division’s intent to finalise the Road Accident Benefit Scheme Bill, which can introduce a no-fault system to make it simpler for street accident victims to entry the advantages with out expensive authorized payments.”