The Special Investigating Unit (SIU) has discovered an alternative bank account belonging to the Road Accident Fund (RAF) containing R50 million, which is currently being recovered. This revelation is part of an ongoing investigation into the fund’s financial operations.
During a recent inquiry by the parliamentary Standing Committee of Public Accounts (Scopa), the SIU’s chief investigations officer revealed that several alternative accounts at Investec held amounts ranging from R1 million to R100 million. It was highlighted that the RAF’s payment and reconciliation processes are still susceptible to fraud, raising serious concerns about governance within the organisation.
The SIU has made criminal referrals regarding funds that left the RAF and were deposited into various individuals’ bank accounts, amounting to R30 million. An analysis of financial transactions has revealed that a family member of an RAF executive received payments from a law firm associated with the RAF, which also provided personal legal services to that executive.
The SIU has reported that the RAF has been investing funds in alternative accounts with the apparent aim of protecting these funds from legal claims. However, these accounts lack proper internal controls, and the interest earned is not adequately monitored. This oversight deficiency creates opportunities for financial manipulation and misrepresentation, undermining the integrity of the RAF’s financial management.
In addition to these findings, evidence of misconduct has been referred to the Legal Practice Council involving at least 102 law firms that received duplicate payments totalling approximately R340 million due to poor record-keeping by the RAF. Many legal practitioners have cooperated with SIU investigations, signing acknowledgments of debt to clear their financial obligations to the RAF.
The SIU has also reported interference in its investigation by RAF executives, stating that staff were instructed to channel their responses through the CEO’s office before addressing the SIU. This interference has been deemed unacceptable, and a criminal case has even been opened against an RAF executive for non-cooperation with the inquiry.
The investigation has revealed substantial governance failures at the RAF, including a lack of accountability for critical financial decisions and dysfunctional oversight committees. These issues have fostered an environment conducive to maladministration and financial risk, hampering the RAF’s ability to fulfil its mandate of compensating road accident victims.