Des Erasmus
Gauteng Premier Panyaza Lesufi on Wednesday night denied any role in a financial settlement reached with controversial former provincial health CFO Lerato Madyo.
“Premier Lesufi 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 Ms Madyo’s disciplinary hearing commenced prior to his tenure,” a statement from Lesufi’s office said.
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Madyo has been linked via investigative reporting and by opposition political parties to the Tembisa Hospital procurement scandal uncovered by slain whistleblower Babita Deokaran.
News24 has reported that Deokaran flagged nearly R850 million in suspicious transactions at the hospital and tried to stop more than R100 million in payments. She sent her concerns to Madyo, who was her superior at the time, shortly before being assassinated in 2021.
“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,” said Deokaran after flagging the transactions.
Madyo initially froze just over R100 million in the flagged payments, but the money was later released, and the dodgy contractors were paid.
Madyo was facing disciplinary charges related to the contracts when she allegedly resigned.
The Special Investigating Unit said in an interim report last year that its investigation had identified more than R2 billion in alleged looting at the hospital — the result of procurement fraud, maladministration and organised syndicates operating through thousands of purchase orders and hundreds of service providers.
It was Democratic Alliance health spokesperson Jack Bloom who alleged earlier on Wednesday that Madyo did not resign, and was instead paid a “lucrative settlement package”.
Said Bloom in a statement: “Gauteng Health MEC Nomantu Nkomo-Ralehoko [said] 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’.”
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“The [confidential] settlement was authorised by the Accounting Officer, and the Premier’s Office was informed,” said Bloom.
“[Madyo] is surely a chief suspect amongst the small number of those who could have tipped off the mastermind behind Babita’s murder,” said Bloom.
But Lesufi’s office said that in terms of the Public Service Act “and applicable regulations, the Premier does not possess the authority to appoint or dismiss chief financial officers employed at the deputy director’s general level.
“Legally, that responsibility belongs exclusively to the Executive Authority overseeing the specific department that employs the individual.”
Lesufi said his office “did not form part of the negotiations and decision-making that led to the monetary settlement” and was only approached by the Department of Health after the agreement had already been finalised.
“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.”
Lesufi said he declined to give that approval because his office had not been consulted beforehand.
“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,” said Lesufi’s office.
“We will not hide any form of wrongdoing, especially on matters related to the unfortunate loss of life of the late Babita Deokaran,” said Lesufi.
The DA laid criminal charges against Madyo in October 2025 for contravention of the Prevention and Combating of Corrupt Activities Act (PRECCA), the Criminal Procedure Act, and violations of the Public Finance Management Act (PFMA).
Said Bloom in his statement: “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.
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“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.”
