SIU unhappy with lack of co-operation as it probes Road Accident Fund

The Special Investigating Unit (SIU) says it has experienced a lack of co-operation from the Road Accident Fund (RAF) in its investigation into the affairs of the entity. 

Briefing parliament's standing committee on public accounts on Friday on its investigation into the affairs of the RAF, SIU head Andy Mothibi said information provided by the RAF in response to requests from the SIU pertained mostly to a period outside that stipulated in terms of the SIU Act.

Some of the requests to date had not been responded to by the RAF.

“There were instances where the SIU had to resort to opening a criminal case against a RAF executive for failure to adhere to a lawful subpoena issued by the SIU in terms of the SIU Act.”

Mothibi said its investigation methodology involved a right of reply from the implicated party.

“In our RAF investigation, we noted with concern a directive issued by the RAF to its employees in respect of the right of reply, wherein employees were directed to forward the SIU’s right of reply to the RAF management, such that responses to the SIU are well co-ordinated.

“We viewed this directive as having a potential to compromise the investigation and it could amount to interference,” Mothibi said.

He said the SIU had engaged with RAF management to ensure it did not compromise the investigation. The SIU had directed communications to the RAF CEO Collins Letsoalo.

“We hope the CEO will consider our correspondence and respond to us as appropriate.”

The SIU investigation into serious maladministration in the RAF followed a proclamation issued in 2022. 

Leonard Lekgetho, SIU's chief national investigations officer, said it had completed a number of investigations and was in the process of pursuing civil litigation.

These included the decision by the RAF to do away with a panel of attorneys, an office building contract worth R17m per year for five years, a R12m cleaning contract and a R40m office furniture contract. The SIU also investigated 102 law firms, which included sheriffs, that received duplicate payments from RAF of about R340m.

When approached with evidence, several legal practitioners co-operated with the SIU investigators by signing acknowledgments of debt The SIU had signed acknowledgments of debt to the value of R70m with actual cash recoveries to date amounting to R42m.

Lekgetho said it was alleged the RAF had cancelled the panel of attorneys without a backup plan in place to service the road accident claims. The contract ended in 2020.

The SIU's preliminary investigation revealed that this had led to the RAF having no representation in court for at least 12 months.

Lekgetho said the SIU interviewed the RAF management regarding its rationale to forgo the panel of attorneys.   

“The decision to not proceed with contracting a panel was not approved by the board. The board approved a strategy where the RAF had to reduce its administrative costs, including legal costs. There was no plan adopted to replace the panel of attorneys.”

The SIU noted there had been an increase in default judgments issued against the RAF since the termination of the panel of attorneys. This had resulted in the RAF incurring unnecessary expenditure on legal costs and paying more than it should in claims.

“The impact of forgoing the use of the panel and lack of representation caused an increase in default judgments and the total amount of default judgments issued against the RAF for cost and fees from 2018 until the second quarter of 2023 amounted to close to R4.7bn.”

Among these default judgment lay claims which might have not warranted substantial settlement if defended.

“The impact is further illustrated in a matter where a claimant was awarded a default court order amounting to R11.1m which the RAF failed to honour on time and led to this amount accumulating interest worth about R500,000 which was paid out on January 24 2023.”

Lekgetho said the SIU was preparing the necessary evidence packs for referrals relating to disciplinary or administrative action and civil litigation against all members responsible for causing loss, damage and for contraventions of the relevant laws.

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