{"id":844173,"date":"2025-11-23T13:00:00","date_gmt":"2025-11-23T11:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=844173"},"modified":"2025-11-21T16:17:17","modified_gmt":"2025-11-21T14:17:17","slug":"insolvent-state-owned-company-in-south-africa-dishes-out-over-r6-7-million-in-bonuses","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/844173\/insolvent-state-owned-company-in-south-africa-dishes-out-over-r6-7-million-in-bonuses\/","title":{"rendered":"Insolvent state-owned company in South Africa dishes out over R6.7 million in bonuses"},"content":{"rendered":"\n<p>Executives of the embattled Road Accident Fund (RAF) gave themselves R6.74 million worth of performance bonuses in the 2024\/25 financial year \u2013 with the controversial former CEO getting a comfortable R2.8 million bonus.<\/p>\n\n\n\n<p>This comes while the RAF, South Africa\u2019s government insurer funded by a R2.18-per-liter fuel levy, is in severe financial and governance crisis.<\/p>\n\n\n\n<p>It collects over R48 billion annually from the fuel levy but faces insolvency amid corruption claims and mismanagement.<\/p>\n\n\n\n<p>At the end of the 2024\/25 financial year, the RAF had R10.4 billion in unpaid claims and a total claims liability of R40.4 billion, yet relies on monthly fuel levy revenue of about R4 billion, making the fund technically bankrupt.<\/p>\n\n\n\n<p>Allegations of hidden funds, manipulated accounting, and asset shielding have deepened mistrust.<\/p>\n\n\n\n<p>In July 2025, Transport Minister Barbara Creecy dissolved the RAF Board due to persistent dysfunction.<\/p>\n\n\n\n<p>An interim board was appointed in August, following the suspension of CEO Collins Letsoalo for insubordination.<\/p>\n\n\n\n<p>The RAF has faced adverse or disclaimed audit opinions for the past five years, and is running a R27.8 million deficit, which has grown over a decade.<\/p>\n\n\n\n<p>Despite this, the total remuneration paid to executive management at the RAF for the 2024\/25 financial year amounted to R32,552,000, marking an increase from the R29,956,000 reported in the previous financial year.<\/p>\n\n\n\n<p>ActionSA MP and Standing Committee on Public Accounts (SCOPA) member Alan Beesley told Newsday that \u201cthe excessive performance bonuses paid to the executives of the RAF is morally wrong and shocking.\u201d<\/p>\n\n\n\n<p>\u201cThe RAF is bankrupt and key performance indicators have gone backwards. One must ask how the executives can receive a performance bonus when victims of accidents are receiving very little or nothing at all.\u201d<\/p>\n\n\n\n<p>\u201cThese bonuses speaks to an organisation that has lost its moral compass and has become a feeding scheme for a few. It is so wrong on so many levels,\u201d added Beesley.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/newsday.co.za\/wp-content\/uploads\/2025\/11\/RAF-salary.png\" alt=\"\" class=\"wp-image-11258\"\/><figcaption class=\"wp-element-caption\">Graphic: Seth Thorne<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Parliament\u2019s probe<\/h2>\n\n\n\n<p>Parliament\u2019s SCOPA launched an inquiry into the RAF\u2019s \u201ctoxic leadership\u201d and possible criminal misconduct, receiving over 100 submissions from lawyers, doctors, staff, and victims. Allegations include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Poor vetting of senior executives with reckless financial histories<\/li>\n\n\n\n<li>Average claims processing delays of four years<\/li>\n\n\n\n<li>Financial mismanagement and undisclosed liabilities of R500 billion<\/li>\n\n\n\n<li>Excessive spending on personal security: former CEO Collins Letsoalo reportedly spent R23 million (2023\u20132025), including R10 million on hotel stays and bodyguards<\/li>\n<\/ul>\n\n\n\n<p>Former RAF Chief Actuary Itayi Charakupa said there is \u201cno logical reason\u201d for underreporting liabilities, stressing the importance of accurate financial disclosure for public entities.<\/p>\n\n\n\n<p>In early November, the RAF board placed the Acting CEO, CFO, Chief Governance Officer, and Head of the CEO\u2019s Office on precautionary suspension to allow an independent investigation into administrative and governance failures.<\/p>\n\n\n\n<p>The inquiry has exposed extreme dysfunction: MPs have been unable to locate Letsoalo, who is wanted to explain his role in governance failures.<\/p>\n\n\n\n<p>SCOPA chair Songezo Zibi reported that attempts to serve him a subpoena failed; the addresses he previously used were abandoned.<\/p>\n\n\n\n<p>If he does not appear, Parliament may lay criminal charges for defying a summons.<\/p>\n\n\n\n<p>Zibi highlighted alarming governance lapses, including a major accounting policy change affecting 500,000 claimants implemented without board approval.<\/p>\n\n\n\n<p>Nearly R1 billion in procurement was outsourced to two external companies without proper oversight.<\/p>\n\n\n\n<p>\u201cDysfunction is the best way to put it,\u201d said Zibi.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>By <a href=\"https:\/\/newsday.co.za\/author\/seth-thorne\/\"><strong>Seth Thorne<\/strong><\/a>. This article was first published on <a href=\"https:\/\/newsday.co.za\/\"><strong>Newsday<\/strong><\/a> and republished with permission. <a href=\"https:\/\/newsday.co.za\/south-africa\/11255\/troubled-raf-executives-give-themselves-big-performance-bonuses\/\"><strong>Read the original here<\/strong><\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Executives of the embattled RAF gave themselves R6.74 million worth of performance bonuses in the 2024\/25 financial year \u2013 with the controversial former CEO getting the biggest share.<\/p>\n","protected":false},"author":125,"featured_media":814281,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[4563,23338,9818],"class_list":["post-844173","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-bonuses","tag-newsday","tag-raf"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/844173","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/125"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=844173"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/844173\/revisions"}],"predecessor-version":[{"id":844174,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/844173\/revisions\/844174"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/814281"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=844173"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=844173"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=844173"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}