‘We continue to do so’ says CEO, who claims an SIU report said to implicate him in ‘possible wrongdoing’ in a R79m office lease was leaked to damage the chances of his contract being renewed.
The Road Accident Fund (RAF) is preparing its latest financial results in terms of Generally Recognised Accounting Practice (GRAP) and GRAP 3 despite the Supreme Court of Appeal (SCA) this month declining an RAF application for leave to appeal a high court judgment criticising its accounting policy.
“We are preparing our financials in terms of GRAP,” said RAF CEO Collins Letsoalo on Monday. “We have done so and we continue to do so. Our financials are done in terms of GRAP as a framework.”Letsoalo was speaking at a media conference to respond to weekend reports regarding an apparently leaked preliminary Special Investigating Unit (SIU) report about the RAF’s procurement of office space for its Johannesburg regional office.
However, the majority of the media conference was devoted to the RAF’s accounting standards.
ALSO READ: R25.5 billion deficit over five years — Can RAF afford to pay out claims?
Procurement of office space
Asked why he did not comment on the preliminary findings by the SIU instead of the media report, Letsoalo said: “I don’t have to. I have answered the one [question] about the building because it is what was written about.”
He added that the SIU must answer for itself what its preliminary findings are because he knows findings or reports of the SIU “are for the president and before that there can’t be any findings by the way”.
Letsoalo also stressed that the RAF is cooperating with the SIU.
Reports about the leaked preliminary SIU report claimed it implicated Letsoalo in possible wrongdoing in a R79 million lease for the fund’s Johannesburg regional office.
Letsoalo on Wednesday provided a number of documents, including the RAF’s motivation to National Treasury requesting a deviation from normal procurement process to acquire the office space for the regional office for a period of five years after many failed attempts to acquire office space.
He also provided a copy of a letter signed on 21 February 2021 by Estelle Setan, the acting chief procurement officer at National Treasury, stating that “the reasons provided are justifiable” and “National Treasury supports the deviation”.
ALSO READ: WATCH: Letsoalo denies misleading Scopa on RAF’s state of affairs
Witch hunt?
Letsoalo said he doubts the leaked preliminary report was released with the blessing of the SIU leadership and claimed the leak aimed to advance a narrative in the media “about me”.
“My contract is coming to an end in August 2025 so we are going to see all these funny things and rehashing things of 2021 and something that happened in 2020 to ensure my name is in the media for the wrong reasons.
“This idea of this rogue CEO going amok and controlling everyone will never stand the test of time because evidence will suggest otherwise,” said Letsoalo.
“I find quite distasteful that people would leak stuff to try and feed certain narratives.
“When you go and take R36 billion from people you expect it. It’s going to come.
“Turning around the RAF is not for sissies because anything you are going to do, as long as it does not benefit lawyers, medical schemes, actuaries, doctors you are not going to be liked,” he said.
ALSO READ: ‘It is in a shambles’: Numsa demands removal of RAF CEO Collins Letsoalo
Letsoalo’s reference to R36 billion relates to savings he claims the RAF has made over the past five years of his leadership.
He expressed confidence in returning as RAF CEO once his contract expires.
“It’s up to the power[s] that be to approve that as it were but I’m ready for another term. So I have no intention of going anywhere – not yet at least,” he said.
Letsoalo said his chances of being reappointed RAF CEO are “very high”.
“I just told you, R36 billion in savings. I want to see any CEO in South Africa that saves R36 billion, 80% performance and achieved all targets and objectives for our strat [strategic] plan over the last five years.
“I’m interested in the next term,” he said.
ALSO READ: Troubled Road Accident Fund needs a major overhaul
About those accounting standards …
Letsoalo said he had spent a lot of time on the RAF’s accounting policy in the media briefing because “somebody said Collins unilaterally changed the accounting policy”.
He said he presented what the Accounting Standards Board (ASB) and National Treasury have said on the issue.
However, Judges Brenda Neukircher, Graham Moshoana and Graham Girdwood in April 2024 dismissed with costs the RAF’s challenge of the Auditor-General of South Africa (AGSA) disclaimer of the fund’s 2020/2021 annual financial results and for an order declaring the disclaimer invalid and unlawful.
The judges said it is common cause that owing to the application of the RAF’s new accounting policy, the liabilities of the RAF substantially transformed by almost a sizeable percentage and the question then becomes, how relevant, reliable and faithful is that to the users?
They said a reduction in liabilities from R300 plus billion to R30-odd billion completely changes the financial position and performance of the entity.
“Such a policy cannot, by any stretch of imagination, be neutral, prudent and complete in all material respects.
“In simple terms, Directive 5 on GRAP and GRAP 3 were simply unavailable for the RAF,” the judges said.
“The conclusion … is that the AGSA did not commit any error of law and that the decision to issue the disclaimer on the terms she did, was lawful and rational,” they said.
ALSO READ: RAF board faces delinquency threat amid auditor-general dispute
The RAF then petitioned the SCA for leave to appeal, which was also dismissed, resulting in the fund appealing to the Judge President of the SCA for reconsideration of the matter.
The matter appeared before SCA Acting Deputy President Ashton Schippers on 31 March 2025, who dismissed the matter with costs earlier this month.
Deputy Minister of Transport Mkhuleko Hlengwa welcomed Judge Schippers’s judgment, which he described as an indictment of the RAF board.
Hlengwa emphasised that the issue must now be resolved in accordance with the ASB’s guidance.
“The RAF board must be mindful of its fiduciary responsibilities and act in the collective interests of the entity,” he said.
“I expect the RAF to comply with the AGSA and ensure RAF’s alignment with the appropriate accounting framework.”
This article was republished from Moneyweb. Read the original here.
