Psychiatrist Dr Kiran Sukeri will not appeal the Health Ombudsman's findings on the conditions of Tower Psychiatric Hospital in Fort Beaufort.
Sukeri's claims of patient mistreatment at the facility were found to be "unreliable" by Ombudsman Malegapuru Makgoba.
The ombudsman's scathing report also recommended the psychiatrist's immediate suspension until his fitness for office could be determined.
Sukeri defended his integrity and expressed his disappointment in the decision in a statement issued on Thursday.
"To be clear, my decision to shed light on what was happening at Tower Hospital was not motivated by self-interest but rather by my deep concern for the patients at Tower Hospital and for mental healthcare patients in general," he said.
"I am delighted to see that a number of positive changes have already taken place in consequence of the light focused on the state of mental healthcare in the Eastern Cape."
He added that he stood by his claims and encouraged the ongoing support from NGOs, professional bodies and the public in general.
Following Makgoba's decision, the South African Medical Association (SAMA) said the Health Ombudsman had done a disservice to the health profession by placing emphasis on Sukeri's "allegedly unethical conduct".
'Life Esidimeni hysteria'
The association believes that the actions of the ombudsman that "discredited and humiliated" Sukeri will discourage other health practitioners from coming forward.
"Healthcare practitioners have an ethical duty to act as advocates for their patients, which encompasses the duty to expose injustice and human rights violations committed against patients," SAMA explained.
Makgoba briefed members of the media on the "Report on an Investigation into Allegations of Patient Mismanagement and Patient Rights Violations at the Tower Psychiatric Hospital and Psychosocial Rehabilitation Centre" last month.
The report stated that Sukeri's claims had created "Life Esidimeni hysteria".
The widely publicised Life Esidimeni tragedy resulted in the deaths of 144 mentally ill patients after the Gauteng health department sent them to unaccredited NGOs in 2016 in an attempt to save money.
"There was a false Life Esidimeni copycat phenomenon because of Sukeri's false statements. This frenzy created a national mass hysteria. This simple complaint should not have turned into a national issue," Makgoba said.