UPDATE | Babita Deokaran: Tembisa Hospital CEO, health dept CFO suspended amid R850m scandal

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Babita Deokaran.
Babita Deokaran.
  • Under fire Gauteng health department CFO Lerato Madyo has been suspended. 
  • Madyo is a central figure in what was Babita Deokaran's last graft investigation.
  • She failed to act on Deokaran's concerns, and no investigation was initiated. 

The Gauteng health department confirmed chief financial officer (CFO) Lerato Madyo and the head of Tembisa Hospital, Ashley Mthunzi, have been placed on precautionary suspension with immediate effect.

The suspensions come as the Special Investigating Unit (SIU) begins probing suspicious payments, totalling R850 million, made by the hospital to various entities, many of them shell companies.

News24 learnt of Madyo's suspension hours before the department confirmed it in a press statement.

Earlier, well-placed sources in the department said Madyo had been placed on suspension on Friday morning, a month after News24 began publishing a series of exposes, titled Silenced.

The department added Madyo and Mthunzi were suspended "to ensure that their presence in the office does not impede the investigation of the serious allegations pertaining to the improper procurement and payment of service providers at Tembisa Hospital".

It said:
Given the seriousness of the allegations and the possible link to the murder case of Babita Deokaran - former chief director of finance, exemplary public servant and courageous whistleblower, who was brutally killed a year ago - the Special Investigating Unit has been appointed to investigate these allegations with urgency.

The statement noted Gauteng Premier David Makhura "welcomed the precautionary suspensions and further confirmed that the Gauteng government has referred the matter to the Special Investigating Unit for forensic investigation on an urgent basis".

In the weeks before her assassination last year, Deokaran stumbled across a surge in spending out of the East Rand hospital and called for a stop to payments and an urgent investigation. Her pleas were ignored.

Special report | Why Babita Deokaran was murdered

Just days before the killing, she confided in Madyo her life might be in danger.

News24 revealed Madyo sat on her concerns until after she was murdered, and never acted on a report into the "possibly fraudulent" payments from the hospital. 

Last week, Makhura announced the appointment of an independent investigator, and the SIU also announced it had started the process to launch its own inquiry. 

This as Madyo faced an internal inquiry and was called upon to explain her inaction around Deokaran's warnings around Tembisa Hospital, and why her concerns were not escalated.

 Lerato Madyo
Lerato Madyo.

News24 identified a web of shell corporations which extracted more than R110 million through dubious contracts in a matter of weeks, selling everything from medical equipment to skinny jeans to the hospital. 

Madyo could not be reached for comment at the time of publishing.

The department's statement also noted its head of department, Dr Nomonde Nolutshungu, had opened a case with police after recently receiving threats from "anonymous sources".

She is the second government official who has received threats, with Presidency director-general Phindile Baleni receiving a bullet and letter in her letterbox.

The letter told Baleni to advise authorities to release the men arrested for Deokaran's murder.

Earlier on Friday, the DA's Jack Bloom revealed he was told the Public Protector had initiated an investigation into Madyo's appointment.

The probe comes after Bloom lodged a complaint with the Public Service Commission (PSC).

In response to his complaint, the PSC said, in a letter, the matter had been referred to the acting Public Protector, advocate Kholeka Gcaleka, for investigation.

"I welcome this investigation by the Public Protector, which will hopefully uncover the truth about Madyo's appointment.

"I suspect she was manipulated into the job to protect a sophisticated criminal syndicate linked to top ANC politicians, who have profited from looted health money for many years," Bloom said.

Department spokesperson Motalatale Modiba added it "is yet to be notified of an investigation" by the Office of the Public Protector.

"However, the department has no problem cooperating with any investigation by state institutions into the matter," Modiba said.  

- Additional reporting by Iavan Pijoos

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