The Democratic Alliance in Gauteng has accused the provincial Health Department of paying a confidential “hush money” settlement to former Chief Financial Officer Lerato Madyo, allowing her to exit amid unresolved disciplinary charges tied to the multibillion-rand corruption scandal at Tembisa Hospital.
Madyo faced 13 misconduct charges related to controversial contracts at Tembisa Hospital, which were originally flagged by whistleblower Babita Deokaran before her murder in 2021. The scandal has involved allegations of widespread irregular tenders, procurement irregularities, and suspicious payments totaling hundreds of millions of rands—some reports citing figures up to R850 million in questionable contracts and broader looting exceeding R2 billion at the facility.
According to the Democratic Alliance (DA), Madyo was suspended with full pay for two years, during which she reportedly received around R3 million in salary. Instead of concluding the disciplinary inquiry—which the party claims could have implicated others and potentially led to criminal charges—the department entered into a settlement agreement with her. She departed on 31 July 2024, retaining her pension and receiving an additional undisclosed settlement amount. The DA estimated this extra payout could be approximately R2 million, representing the balance of her contract, though the exact figure remains confidential due to a mutually agreed clause.
The agreement was signed off by the head of department, Lesiba Malotana, who is currently suspended after failing a lifestyle audit.
The DA described the settlement as a potential violation of the Public Finance Management Act (PFMA), arguing that state agreements involving public funds cannot legitimize unlawful conduct and must be subject to public scrutiny. South African courts have previously ruled that such settlements are reviewable and cannot shield wrongdoing through secrecy.
In October last year, the DA laid criminal charges against Madyo for alleged contraventions of the Prevention and Combating of Corrupt Activities Act, the Criminal Procedure Act, and the PFMA.
The party has demanded the full settlement agreement be made public, including details of the financial amount paid. It plans to pursue further legislative oversight and possible legal action to challenge the agreement’s lawfulness and ensure accountability.
The case continues to highlight ongoing concerns over transparency in the Tembisa Hospital scandal and the handling of officials linked to irregularities flagged by Deokaran, whose warnings about suspicious payments went unheeded by Madyo, according to the DA. The Gauteng Health Department has previously maintained that Madyo’s departure was a resignation, though legislative replies confirmed the settlement framework.