An intricate web of corruption and claims of identity theft involving the Road Accident Fund (RAF), the City of Joburg (CoJ) and Investec Bank has been uncovered after a Pretoria-based law firm discovered that the RAF allegedly had 16 bank accounts with Investec Bank under two profiles.
The scandal was uncovered after an innocuous bank attachment by the law firm, which was seeking to secure money which was owed to its clients by the RAF. It is suspected that the money which was meant for claimants was deposited into these suspicious accounts held at Investec Bank to hide the funds from the rightful owners, the claimants.
On December 31, 2019, the RAF had claims to the value of R17.2 billion that were finalised, but could not be paid due to financial cash flow challenges and liability grew to R293bn, as stated in its Annual Performance Plan 2020-21.
Documents seen by Independent Media’s investigations unit show two profiles for bank accounts with the RAF reference, with the first profile named “The City Of Johannesburg/Road Accident Fund” under which there are three accounts. This profile was declared to be belonging to the CoJ even though the name contravenes the Financial Intelligence Centre Act (FICA) and poses as a suspicious account. It also contravenes the FICA principle of “know your client”.
The second profile was named “Road Accident Fund Pty Ltd 1992/002160/07” under which there are 13 accounts. This profile was confirmed by Investec to be belonging to the RAF, as seen in email correspondence from Investec Bank.
When reached an Investec spokesperson said Investec and City of Joburg had provided evidence that the disputed accounts were not held by the RAF.
“An application brought urgently by the lawyer and opposed by the City of Johannesburg, RAF and Investec was heard in the High Court, Pretoria, and the lawyer’s version was dismissed with punitive costs against him.”
The RAF, through its chief executive Collins Letsoalo, confirmed the existence of the accounts. However, he said the accounts were dormant and had been dormant for years. This was contrary to what he had said in a TV interview on February 14, 202, where Letsaolo flatly denied the existence of these accounts.
Apart from Letsoalo, other executives allegedly at the forefront of this scandal are finance manager Sefotle Modiba and acting chief financial officer (CFO) Boitumelo Mabusela, who were allegedly unilaterally appointed by Letsoalo during the lockdown.
Notably Mabusela was appointed when there already was an acting CFO within the organisation who had been appointed internally by the previous board. Mabusela was a director at Intersite – a company whose identity was allegedly stolen by the RAF when opening an account with Investec. The registration number used by the RAF to open the account belonged to Intersite – an asset management company belonging to Prasa.
It is understood that the attorneys brought this to the attention of the RAF, Prasa, CoJ. We have seen the communication between Investec Bank attorneys and these attorneys wherein the Pretoria-based firm was asking Investec to explain the discrepancy. Investec, through its attorneys became evasive and combative towards the attorneys even though there was a clear identity theft by the RAF.
When reached, RAF spokesperson William Seripele Maphutha said since Letsoalo’s secondment and subsequent appointment as RAF chief executive had never opened any bank account, with any bank, and he simply could not open a bank account for RAF without the RAF board and National Treasury approval as per the PFMA and its regulations.
Maphutha welcomed any investigation by the Hawks or any other law enforcement agency and said the RAF and its officials would co-operate fully with any such investigation.
“We are not aware of any case including the one you mention in your inquiry that has been opened against the CEO and other RAF officials. We are consequently also not aware of any case being transferred to the Hawks.
“We are, however, glad that finally these rumours and spurious allegations are now reported to the law enforcement authorities and the pedlars of these rumours and allegations have finally come under oath. Our rights are fully reserved in this regard,” he said.
The matter of identity theft by RAF was brought to the attention of the Financial Sector Conduct Authority, which declined to take action and referred the matter to South African Reserve Bank Prudential Authority, which in turn also referred the matter to the Ombudsman.
The identity theft matter was also brought to the attention of Intersite secretary Gary Mabunda and this was confirmed by email correspondence seen by us where Mabunda thanks the Pretoria-based firm for bringing the matter to their attention.
Mabunda brought it to the attention of Investec who refused to give him a meaningful explanation regarding the identity theft by the RAF and instead they referred Mabunda to CIPC for clarity. In essence, it appears as if the bank was absolving itself from this shocking revelation.
When an inquiry was sent to the RAF by Mabunda, they deferred the response to their attorneys who responded by saying that the RAF was not registered as a PTY LTD, something that raised questions about why they used the profile name “Road Accident Fund Pty Ltd 1992/002160/07” when they opened an account at Investec Bank and most importantly, why did they use the registration number Intersite to open that account?
Independent Media’s investigations unit also established that Investec Bank, the Presidency, the Minister of Transport, Intersite, the Prasa board chairperson, the City of Joburg were notified about these illegal activities, however, nothing tangible has happened to bring those involved to book.
Investigations Unit – [email protected]