Police are investigating how millions of rands in funds earmarked for road accident victims went “missing”.
The Road Accident Fund (RAF) owed R14.1m to attorney Kabelo Malao, who represents 29 claimants in cases that were due to be finalised in 2021. With interest, that amount has grown to R29m.
While RAF acting CEO Phathutshedzo Lukhwareni claimed in an affidavit delivered to the police last month that the money had been paid to the sheriff of the court in 2023, no evidence that this was done could be produced, prompting concerns the money may have been diverted.
Back in 2021, now-suspended RAF CEO Collins Letsoalo acknowledged in an affidavit that the fund owed Malao R14.1m.
But Letsoalo said he did not want to pay the attorney directly. Instead, he wanted to pay the clients, which would have undermined Malao’s power of attorney status. Letsoalo claimed Malao was corrupt, though no adverse finding was ever made against him, despite a Special Investigating Unit (SIU) probe into his affairs.
The Hillbrow economic crimes unit has found the money cannot be accounted for. This is allegedly because documents appended to the affidavit delivered by Lukhwareni to the police contradict information on the RAF’s official payment system.
Lukhwareni provided the affidavit after a magistrate’s court issued a warrant of arrest for officials found to have been involved in the missing R14.1m payment.
The Sunday Times has established that Lukhwareni claimed the money was paid to the sheriff of the court in Centurion in 2023, despite his not being able to produce any proof of payment.
The sheriff has shown the police bank records that reveal the RAF never paid the R14.1m in 2023.
“We take serious exception [to being] accused of receiving funds in our trust account and not paying out the money to our clients,” said sheriff Emily Dlamini in a letter to Malao.
I can account for each and every cent that gets paid into my trust [account], and [I] also have turnaround times to pay money to clients
— Emily Dlamini, court sheriff
“Our record speaks for itself, and I can account for each and every cent that gets paid into my trust [account], and [I] also have turnaround times to pay money to clients,” Dlamini said. “Please note that we have checked our trust account to verify if these payments were received, and [can] confirm that the payments were not received by the sheriff.”
In an interview with the Sunday Times, Malao said: “We have obtained evidence to prove that our clients' money has been stolen within the RAF. Let me call it what it is: the money was stolen.
“We wish to clarify that Collins Letsoalo does not owe our firm or me personally. The RAF owes our clients, and we act on behalf of those clients. Our fees are drawn from awards paid directly to our clients. If he [Letsoalo] has any such allegations, he is expected to substantiate them by furnishing evidence; otherwise, he is merely clutching at straws. We have already issued summons against him for spurious allegations.”
The RAF has refused to answer questions from the Sunday Times about the Malao payments, despite acknowledging in correspondence with Malao and in court that it owes the money.
“Kindly be advised that I hereby confirm that my department is preparing payment for the above writs in the amount of R14,164,282.62 in order to satisfy payment of the writs,” former transport director-general Alec Moemi said in 2021.
Malao said his firm faced liquidation and his children expulsion from school because of unpaid fees.
“We have obtained evidence to prove our clients' money has been stolen within the RAF,” he said to the RAF. “My case is [one of] clear victimisation, and these people ran this campaign against me because they know I’m the one who reported them to the SIU, the standing committee on public accounts [Scopa], and [the relevant] portfolio committee. We hope you will do the right thing.”
The SIU said in March that an investigation had found that money meant for road accident victims had been diverted from the RAF to officials within the fund.
At the heart of the latest scandal is a discrepancy in payment dates, with the RAF claiming bank payments of R1.6m and R5m were made to the Centurion sheriff on January 6 2023. However, the RAF’s system reflects these payments as having been made on February 1 2023.
Lukhwareni’s affidavit to the police attributes this to a “reconciliation process”, explaining that payments made under duress are processed outside the normal claims system, and a “journal entry” is created later, reflecting a different date.
This explanation has raised questions regarding the transparency and accountability of the RAF’s financial systems.
“Why such a gap between these dates? How come this is not reflecting on the financial enquiry system of RAF? The payments mentioned should be traced or confirmed to the bank accounts of both the sheriff and [Malao],” said an RAF insider.
This is not just a 'system glitch’ — this is a potential heist of public funds, and someone needs to be held accountable
— Whistleblower
Adding another layer of confusion, Lukhwareni states that “there is no proof of payment for February 1 2023" because this date represents the system posting date, “not actual payment dates to the complainant”.
This admission leaves a gaping hole in the paper trail, fuelling suspicions of maladministration and possible theft. The RAF has declined to clarify the matter because of pending court processes.
Further complicating matters, the affidavit submitted to the police by Lukhwareni details instances of “double payments” in certain cases, and the RAF is now scrambling to recover these amounts. In one case, the RAF refused to pay an amount to the sheriff, deeming the bill of costs “fraudulent” and referring the matter to the Legal Practice Council and the police for investigation.
Police spokesperson Col Dimakatso Nevhuhulwi said the case was under investigation and no arrests had been made.
The allegations of missing funds and system irregularities paint a troubling picture of financial disarray in the vital state entity.
“This is not just a 'system glitch’ — this is a potential heist of public funds, and someone needs to be held accountable,” said one whistleblower.
Letsoalo was suspended in May for insubordination, specifically for his refusal to appear before Scopa during an investigation.
His contract has since expired and was not renewed, according to transport minister Barbara Creecy. Letsoalo is challenging the decision not to renew his contract in court.
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