Former Gauteng Health CFO Lerato Madyo was allegedly paid a settlement amount to leave the department after she was implicated in the looting of more than R2 billion at Tembisa Hospital.
Image: Democratic Alliance / X
The Gauteng Department of Health (GDoH) has allegedly paid the former Chief Financial Officer (CFO) Lerato Madyo, who was a central figure in the looting of more than R2 billion at Tembisa Hospital, a settlement to leave the department.
At the same time, she was never held to account for her actions and involvement in the corruption scandal.
These shocking revelations were announced by the DA during a media briefing at the Gauteng Legislature on Wednesday morning.
The DA also revealed that Madyo, who has reportedly changed her identity, has moved to Limpopo.
In August 2024, Madyo, who is reportedly using the name Daniella Molapo, resigned after her suspension following her implication in the Tembisa Hospital corruption scandal.
Madyo is accused of failing to act on warnings from slain chief director of financial accounting and whistle-blower Babita Deokaran, who flagged over R850 million in suspicious payments at the hospital before her assassination in 2021.
The murder of whistle-blower, Babita Deokaran, who courageously flagged suspicious payments, underscores the deadly consequences of corruption and the urgent need for systemic reform.
Image: Supplied
While Madyo briefly froze some suspicious payments at Deokaran’s request, she allegedly released them shortly after Deokaran's murder. Crucial evidence, including Madyo's cellphone containing WhatsApp conversations with Deokaran from the month of the murder, was reported stolen before it could be analysed by authorities.
During the briefing, the DA’s Shadow MEC for Health in Gauteng, Jack Bloom, revealed that Madyo did not resign; instead, she was paid a lucrative settlement package.
Bloom said this information was revealed by Gauteng Health MEC Nomantu Nkomo-Ralehoko in a written reply to his questions.
He said the parties, GDoH and Madyo, concluded a settlement agreement, the material terms of which are subject to a confidentiality clause mutually agreed upon and signed by both parties.
Bloom said he was told that the settlement agreement contains a confidentiality clause prohibiting disclosure of the material terms, including but not limited to the financial amount paid.
In a statement that was issued shortly following the DA’s briefing, GDoH spokesperson Kealeboga Mohajane said this agreement was concluded in line with applicable labour relations frameworks and was not a “golden handshake”.
Any pension benefits payable arise from the rules of the Government Employees Pension Fund, which operates independently and in terms of statutory provisions,” she said.
Mohajane said that following the investigations, disciplinary proceedings were initiated, but due to evidentiary constraints that affected the viability of the process, the department and Madyo subsequently entered into a termination agreement to bring the employment relationship to an end.
Efforts to get hold of Madyo were unsuccessful as we could not get her contact.
Bloom said the settlement was authorised by the accounting officer, adding that 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 R850m (went up to R2.3bn),” said Bloom.
Gauteng Premier Panyaza Lesufi's spokesperson, Sizwe Pamla, said the premier dismisses any insinuation that he was part of the arrangements to release the pension payout of the department's former CFO and would like to point out that Madyo’s disciplinary hearing commenced prior to his tenure.
Pamla said the Office of the Premier did not form part of the negotiations and decision-making that led to the monetary settlement.
“The Department of Health did engage the Office of the Premier after the agreement had been finalised, notifying the Premier of the outcome and requesting retrospective concurrence. The Premier declined to grant this retrospective approval, citing the lack of consultation or prior involvement of his office.”
He added an independent legal firm has since been appointed to investigate the matter and determine whether the agreement was handled correctly and to advise on any further action required.
Madyo faced 13 misconduct charges, including neglecting her fiduciary duties to properly vet medical supply contracts with grossly inflated prices.
She also failed to prevent fruitless and wasteful expenditure, specifically regarding 13 individual purchase orders she approved among over 1,000 dubious payments, as well as ignoring discrepancies in contracts, including the use of forged documents by shelf companies.
“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,” Bloom said.
The DA claims the settlement agreement may be unlawful and contravenes the Public Finance Management Act (PFMA).
“We are demanding that the agreement be 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 Special Investigating Unit (SIU) report, released in September 2025, confirmed that more R2 billion was siphoned through fraudulent activities and corruption.
Three coordinated syndicates, Maumela syndicate (linked to Hangwani Morgan Maumela), the Mazibuko syndicate (linked to Rudolph Mazibuko) and syndicate X, were identified as being responsible for the losses.
The SIU found approximately 4,500 purchase orders involving 207 service providers, with money being paid out, but no goods were ever delivered to the hospital.
At least 15 current and former officials were implicated in corruption, money laundering, and bid-rigging. Corrupt payments to officials and employees totalled roughly R122 million.
Bloom said what happened at Tembisa Hospital is also happening in other hospitals.
He said this involves high-level political connections, with a lot of people being involved.
“These companies have contracts elsewhere,” he said, adding that it is disappointing that there are still no arrests of those mentioned in the SIU report.
The DA also laid criminal charges against Madyo in October 2025. The charges include her failure to report corruption under Section 34 of the Prevention and Combating of Corrupt Activities Act, breaching the PFMA, including failure to maintain effective financial and risk management systems, as well as attempting or conspiring to commit fraud under Section 18 of the Criminal Procedure Act.
The party indicated that it is actively pursuing the case.