Suspended Road Accident Fund (RAF) chief executive Collins Letsoalo, who once told journalists he “sleeps nicely at night” even when police sirens blare past his home, may now find rest harder to come by.
This comes after Parliament’s Standing Committee on Public Accounts (SCOPA) launched a full-scale inquiry into alleged procurement irregularities and governance failures at the troubled Fund. The decision follows the tabling of an incriminating memorandum during a SCOPA meeting on 24 June, detailing serious claims of mismanagement and misconduct.
Letsoalo made his comments during a media briefing on 14 April, shortly after a leaked preliminary report by the Special Investigating Unit (SIU) surfaced. The report allegedly links Letsoalo to interference in the procurement process for the RAF’s Johannesburg regional offices.
According to the SIU’s interim findings, the RAF is accused of irregularities involving multimillion-rand tenders. Letsoalo is said to have overruled a nine-year lease recommendation made by the Bid Evaluation Committee (BEC) and instead instructed RAF executive Prudence Manyasha to re-evaluate the process.
Manyasha reportedly cited unspecified irregularities – not formally recorded – as the reason for discarding the original lease outcome. The lease was subsequently awarded to Mowana Properties, a company that manages properties on behalf of the Public Investment Corporation (PIC).
The memorandum tabled before SCOPA provided further details about how internal processes were allegedly subverted to cancel a legitimate lease award and reroute it to Mowana.
SCOPA chairperson Songezo Zibi told the committee that a whistleblower with direct involvement in the matter had submitted documentation to back up the allegations. These included emails, meeting minutes and an explanatory memorandum.
“The whistleblower has first-hand knowledge of every aspect of the events and submitted supporting documentation, including minutes of meetings, reports, and an explanatory memorandum,” read the memorandum. “This information, together with that concerning Gxakwe [a company awarded a contract to supply furniture], has been handed over to both the Auditor-General and the South African Police Service for further investigation.”
Zibi further disclosed that the whistleblower had requested police protection after receiving threats. “They wrote to me yesterday to say, ‘Please get the police to protect me. I am feeling unsafe.’ They also wrote to the minister to ask for protection,” he said.
Gxakwe Projects contracts
In 2018, the RAF leased 300 office chairs for its Menlyn (Pretoria) offices from Gxakwe Projects at a cost of about R1 666 per chair per month – adding up to nearly R500 000 each month – and did so without following a formal tender process, TimesLive reported.
RAF officials justified the lease as a temporary solution to prevent furniture and computer equipment from being attached by sheriffs because of the fund’s large backlog of unpaid creditor claims.
According to the memorandum, SCOPA has received a detailed whistleblower report regarding Gxakwe’s appointment to supply the office furniture. The whistleblower’s email included an internal audit report from the RAF, completed in September 2020, which concluded that Gxakwe Projects “should not have been appointed as a service provider” because of numerous irregularities – among them, the alleged use of other bidders’ information as if it were Gxakwe’s own.
It also states that Gxakwe Projects was awarded two contracts by the RAF. The first was worth R36.5 million, and the second, awarded through a deviation from normal procurement processes, was valued at R141.7m.
The memorandum notes that the Auditor-General has been asked to investigate the matter as part of the ongoing audit. In addition, evidence relating to suspected fraudulent entries in the tender evaluation has been handed over to SAPS for further investigation.
Two media services contracts worth R1 billion
The RAF’s contract list, as outlined in the memorandum, disclosed two unusually large media services contracts that seem disproportionate to the Fund’s mandate.
The RAF signed agreements with two media firms, each valued at about R500m, bringing the total to about R1 billion. These contracts are set to run until November 2027 and December 2028, respectively.
However, by the end of March 2025 – more than two years before the contracts expire – only R11m remained on the first contract, while R245m had already been spent on the second. This means about R650m of the total R1bn had been used within just two years.
The memorandum warns that “clearly at this rate, what appear already to be bloated contracts will not last the entire duration unless the total contract price is increased”.
While acknowledging the RAF’s need to communicate with and inform the public about its services, the memorandum expressed serious concern over the large expenditure – more than R650m in two years – with companies whose websites provide no information about their owners, directors, or employees.
“The committee secretariat has asked for detailed tender evaluation, contracting, and payment information relating to the two contracts.”
Vetting failures flagged in SCOPA inquiry
Zibi also raised serious concerns about leadership gaps and poor vetting practices at the RAF, warning these issues are compromising accountability and misusing public funds.
Zibi pointed to major vacancies in the RAF’s organogram, noting that the absence of key roles – such as a chief claims officer, head of claims operations, and head of legal – has hollowed out the Fund’s internal controls.
“As we can see, the people in the regions, according to some of the whistleblower accounts we have, are acting. So, the entire claims ecosystem is gutted,” he said.
He highlighted that the legal department, which is central to the RAF’s litigation-heavy operations, has not had a permanent head for more than two-and-a-half years. Although the posts for chief claims officer and head of legal were advertised in 2023, no appointments followed, and no further action was taken in the latter half of 2023, or in 2024 and the first half of 2025.
“That cannot be correct. That has got a serious impact, because a Road Accident Fund works with litigation, which, in the end, costs taxpayers money,” Zibi said.
He added the RAF confirmed losing 28 legal staff in the past three years and has spent nearly R50m on labour relations costs over the same period.
He further criticised the pattern of individuals facing disciplinary action at one institution being employed at another without consequences. He said the committee has repeatedly raised concerns about the vetting of RAF officials in almost every meeting but continued to receive conflicting reports.
“When you objectively look at the organogram, and you look at the vacancies and the financial impact, you come to the conclusion that someone must account for this state of affairs. It cannot be okay,” he said.
Zibi said the committee would approve the terms of reference for the inquiry on 1 July, with hearings expected to begin after Parliament’s August recess.
“The volume of complaints and related documentary disclosures to the committee about the RAF make it necessary to examine them thoroughly,” said Zibi. “An inquiry will also give everyone involved or implicated the opportunity to state their case under oath and receive a fair hearing before the committee draws its conclusions.”