The Democratic Alliance has accused the Gauteng Health Department of paying a confidential settlement to silence a senior official who was facing disciplinary charges related to the Tembisa Hospital corruption scandal.
The party claims that former chief financial officer Lerato Madyo received an undisclosed payment when she left the department in July 2024, despite the department initially stating she had resigned.
DA Gauteng shadow MEC for health Dr Jack Bloom says the settlement amounts to “hush money” paid to protect those implicated in irregular expenditure exceeding R2 billion at Tembisa Hospital.
“The Department has lied and covered up a hush money payoff to the person who disregarded Babita’s appeal to investigate suspicious Tembisa Hospital contracts worth R850 million,” Bloom said in a statement on Wednesday.
According to a written reply from Gauteng Health MEC Nomantu Nkomo-Ralehoko to questions in the provincial legislature, Madyo left on 31 July 2024 after “the parties concluded a settlement agreement the material terms of which are subject to a confidentiality clause mutually agreed upon and signed by both parties.”
The MEC stated that the financial details cannot be disclosed due to the confidentiality clause in the agreement.
The DA has announced it will challenge the legality of the settlement, arguing it may contravene the Public Finance Management Act. The party plans to request access to the full agreement through the Promotion of Access to Information Act and has called on the current acting head of department to investigate whether the payment was irregular, fruitless or wasteful.
The Tembisa Hospital scandal
The case centres on allegations of fraudulent contracts at Tembisa Hospital that were first flagged by finance official Babita Deokaran in 2021.
Deokaran, who worked as the chief director of financial accounting in the Gauteng Health Department, identified suspicious contracts at the hospital. She raised her concerns with Madyo, who was then the department’s chief financial officer.
Shortly before her death, Deokaran sent Madyo a WhatsApp message stating: “Morning CFO, I am just worried that the guys in Tembisa are going to realise we are onto something. Our lives could be in danger.”
According to the DA, Madyo initially froze R104 million in payments that Deokaran had flagged, but later allowed them to be paid. The party alleges that after telling Deokaran she would commission a forensic investigation, Madyo only authorised a limited sample audit at the hospital.
Deokaran was shot and killed outside her home in Johannesburg in August 2021. Her murder sent shockwaves through South Africa and drew attention to the dangers faced by whistleblowers who expose corruption in public institutions.
Six men were convicted of her murder in 2023 and sentenced to life imprisonment. However, questions remain about who ordered the killing and whether it was linked to her whistleblowing activities.
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Disciplinary proceedings and suspension
Madyo faced 13 misconduct charges relating to her handling of the Tembisa Hospital contracts. She was suspended with pay whilst disciplinary proceedings were ongoing.
The DA claims she received approximately R3 million during a two-year suspension period before the settlement was finalised. The party alleges the department deliberately delayed her disciplinary enquiry before concluding the settlement agreement.
“Instead of concluding this enquiry, which would probably have implicated others and led to criminal charges, she left with her pension and an undisclosed settlement amount,” Bloom stated.
The settlement was authorised by the then-head of department Lesiba Malotana, who is currently suspended following a failed lifestyle audit. The premier’s office was informed of the arrangement.
In October 2025, the DA laid criminal charges against Madyo for alleged contraventions of the Prevention and Combating of Corrupt Activities Act, the Criminal Procedure Act, and violations of the Public Finance Management Act.
Calls for accountability
The DA has outlined several steps it will take to challenge the settlement, including requesting the chairperson of the Gauteng Legislature Health Oversight Committee, Advocate Ezra Letsoalo, to obtain the full agreement and related documentation.
The party also plans to table questions to the health MEC about the legal requirement for the current accounting officer, Dr Darion Barclay, to investigate the agreement’s legality and recover any irregular expenditure.
Bloom has called on both the premier and health MEC to explain why they approved the settlement and why the department initially misrepresented Madyo’s departure as a resignation.
“Instead of being fired without benefits, Madyo got a golden handshake,” he said.
Neither the premier’s office nor the health department has provided further comment beyond the MEC’s written reply to the legislature.
The Tembisa Hospital case remains one of the largest alleged corruption scandals in the Gauteng health system, with investigations ongoing into the full extent of irregular expenditure at the facility.
ALSO READ: DA lays charges against former Gauteng Health CFO over Tembisa Hospital corruption
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