Pretoria - In yet another desperate bid to minimise “reputation damages” to the Road Accident Fund, the organisation failed in an urgent application on Friday to stop the auditor-general from releasing her report regarding the fund’s annual financial statements for the 2021/22 financial year to Parliament.
Gauteng High Court, Pretoria, Judge Norman Davis turned down the application and pointed out that the A-G had clear statutory duties to perform, which included that the report be submitted to Parliament.
Judge Davis said this application was similar to the one launched by the RAF in February this year, in which it also asked for an urgent interim interdict against the A-G from disclosing the report regarding the fund’s finances.
The RAF also lost that court bid and applied for leave to appeal against the February findings. But Judge Davis now pointed out that the appeal is moot, as the findings were already disclosed in the public domain.
In the earlier application, RAF CEO Collins Letsoalo asked that the audit findings remain under wraps, pending a legal bid to review and set aside the A-G’s findings.
The review proceedings are still due to be heard and are at present under case management. Judge Davis remarked that he was not given a reason as to why it was not already disposed of.
The theme of Friday’s urgent application and the one launched in February remain essentially the same – it revolves around the accounting module used by the RAF. Auditor-General Tsakani Maluleke earlier found that the fund has liabilities amounting to more than R300 billion. She found that the accounting module used by the fund was wrong. The RAF maintained that according to its own accounting module, its liabilities are no more than R30 billion.
The RAF, however, despite the Accounting Standards Board and National Treasury’s conclusion that it was an inappropriate module to be used, persisted in using it in presenting its financial statements for the 2021/22 financial year.
The fund claimed it will have success when it takes the issue regarding its accounting module on review. It said if the A-G was allowed to now present the RAF’s financials to Parliament, including her disclaimer of opinion report, it will cause the fund further irreparable harm.
It said it has already suffered reputational damages and it will even worsen if the A-G is not halted. It will “harden” and “intensify” public sentiment against the fund and as a result its costs of insurance for personal liability indemnity of its CEO and principal officers will skyrocket even more.
The fund said the reputational damages may also make it difficult for them to obtain a new transactional banker. Letsoalo told the court that the fund is in the process of finding new transactional bankers. It said if the A-G’s disclaimer of opinion report was made public, it could hamper the fund in finding new bankers.
Judge Davis commented to this that the fund is not a commercial entity. It is not in the market of selling or marketing a service, for which it needs to maintain its reputation. He added that the “damage” done to the RAF’s reputation does not lie in the fact that the A-G is doing her job, but it is “of the fund’s own making”.
Judge Davis said the fund’s complaint that its personal liability premiums can increase if the latest report is released, is not supported by evidence.
He added that all statutory instruments, including the Constitution, demand the swift and transparent reporting of the financial affairs of public
entities. “This requirement for transparency is even more acute in the current state of concern regarding the governance of public entities in South Africa.”
The judge said while it may be more convenient for the RAF if the A-G delayed presenting her report to Parliament, this cannot be allowed.
The A-G indicated that she was due to present her report as soon as the court ruled on the matter.
Pretoria News