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The Democratic Alliance (DA) has uncovered explosive new information about the departure of the Gauteng Health Department's Chief Financial Officer Lerato Madyo who was facing disciplinary charges concerning fraudulent Tembisa Hospital contracts flagged by murdered whistleblower Babita Deokaran.

In August 2024, a department spokesperson said she had resigned, but it is now revealed that she did not resign but was paid a lucrative settlement package.

Gauteng Health MEC Nomantu Nkomo-Ralehoko says in a written reply to my questions in the Gauteng Legislature that Madyo left the department 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."

When I asked how much she was paid, the reply is that "the settlement agreement contains a confidentiality clause prohibiting disclosure of the material terms including but not limited to the financial amount paid."

The settlement was authorised by the Accounting Officer, and the Premier's Office was informed.

This is outrageous. 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.

Shortly before her death, Babita sent Madyo this WhatsApp message: "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."

Madyo initially froze R104 million in payments that Babita flagged but later allowed them to be paid. After telling Babita she would act on her recommendation for a forensic investigation she only did a small sample audit at the hospital, and even this report was suppressed.

Madyo was paid R3 million while suspended with pay for two years as the Department dragged out her disciplinary enquiry on 13 misconduct charges. 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.

She is surely a chief suspect amongst the small number of those who could have tipped off the mastermind behind Babita's murder.

In October last year, the DA laid criminal charges against Madyo for contravening the Prevention and Combating of Corrupt Activities Act (PRECCA), the Criminal Procedure Act, and violations of the Public Finance Management Act (PFMA).

Our legal advice is that the settlement agreement with Madyo can be challenged as unlawful and in contravention of the PFMA. Courts have ruled that state settlements cannot legitimate unlawful conduct, and agreements involving public money are subject to public scrutiny.

We are demanding the agreement is made public, including how much she was paid. It was signed off by the Head of Department Lesiba Malotana, who is currently suspended after failing his lifestyle audit.

The current Acting Head of Department Dr Darion Barclay has the duty as Accounting Officer to investigate whether this agreement violated the PFMA by failing to conclude the misconduct charges and making a payout that may be irregular, fruitless, or wasteful. It should therefore be recovered.

To ensure accountability, the DA will do the following:

• Request the Chairperson of the Gauteng Legislature Health Oversight Committee, Advocate Ezra Letsoalo, to obtain the full settlement agreement between Department and Ms Madyo, as well as documents to confirm whether a financial loss assessment was done, and whether Treasury approval was obtained.
• Institute an application under the Promotion of Access to Information Act (PAIA) for a copy of the settlement agreement and other relevant documents;
• Table questions to the Health MEC about the legal requirement of the current Accounting Officer to exercise his duties under the PFMA to investigate the legality of this agreement and recover any irregular, fruitless, or wasteful expenditure involved.
• Table questions to the Premier to justify why he approved this agreement.

Both the Premier and Health MEC need to explain why they approved this disgraceful settlement agreement, and why the Department lied about Madyo's supposed resignation. Instead of being fired without benefits, Madyo got a golden handshake.

It looks like a cover-up to protect parties implicated in the looting of more than R2 billion from Tembisa Hospital, including kingpins with top political contacts. They got fancy cars, while Babita got bullets in her body.

The DA will not rest until Babita's murderer is apprehended, and all accomplices to the mass theft at Tembisa Hospital are charged and convicted.

Issued by Dr Jack Bloom MPL - DA Gauteng Shadow MEC for Health