The Northern Cape health ministry last month appointed a new chief of staff who stands knee-deep in corruption allegations flowing from his earlier tenure as the department’s head.
Deon Madyo, now serving under provincial health MEC Mxolisi Sokatsha, faces fraud and corruption charges in the Northern Cape High Court, alongside ANC provincial chairperson John Block and Uruguayan businessman Gaston Savoi.
With several others, they have been accused of graft involving about R112-million, in a case involving Savoi’s company Intaka, which sold water purifiers and oxygen plants to the Northern Cape’s health department.
State prosecutors claimed the prices were inflated and that “commission payments” were made to health officials, including Madyo, to grease the deals.
In papers before the court, investigators accused Madyo and others of “fraudulently and corruptly orchestrating” the tenders.
Madyo, Block and Savoi declined to comment, but the last two have previously maintained their innocence. Savoi faces similar accusations in KwaZulu-Natal, alongside senior politicians and officials there.
A draft affidavit prepared by Madyo’s lawyers and seen by the Mail & Guardian suggests he has a serious case to answer.
In the document, he admitted that he had helped to rig a contract to favour Block and Savoi’s company.
He also admitted agreeing to take R12-million from Savoi, allegedly in exchange for further contracts.
But the affidavit, prepared in an apparently failed bid for indemnity from prosecution in exchange for information, has not been signed.
Madyo’s lawyers told the M&G: “We cannot be certain that the affidavit mentioned is in actual fact an affidavit deposed by our client.”
Nevertheless, Madyo’s account dovetails with the findings of forensic investigators and an affidavit submitted to the Hawks by his former colleague, one-time Kimberley Hospital chief executive Hamid Shabbir.
Both detail how the cash-strapped ANC chairperson walked into Shabbir’s office in 2005. The doctor called Madyo, saying he was with “the chief, JB”.
There, Block allegedly put pressure on them to buy equipment from Intaka for the state. Block had recently formed an Intaka subsidiary with Savoi.
Madyo claimed he felt “obliged” because of Block’s political clout, so the pair acceded to his proposal.
“Dr Shabbir and I indicated to Mr Block that we would help him … We would expedite the tender process and the award of the contracts to Intaka,” Madyo said.
The three flew to Cape Town so that Shabbir and Madyo could meet Savoi. Madyo then kick-started his department’s procurement machinery and signed two submissions motivating for a “deviation” from standard tender procedures.
But even before this allegedly rigged tender process could be completed, Madyo said Block wanted Intaka’s contract signed so that he could raise cash “quickly”.
Madyo again agreed: “I signed the contract. Although I was aware of the risks involved in signing the contract prior to approval by the tender board, I wanted to assist Mr Block with his financial predicament.”
Later, when Intaka sought to sell further equipment to the department, Madyo said he and Shabbir agreed to be bribed: “During my meeting with Dr Savoi … he reaffirmed that I would be benefiting to the tune of R8-million in respect of the additional water purification plants and a further R4-million in respect of oxygenators … Dr Shabbir indicated that he had already requested the procurement division to prepare the necessary submissions to the tender board.”
In his affidavit, Shabbir told a similar story.
According to a forensic report before the court, the R8-million owed to Madyo was recorded in Intaka documents.
“There is also a commission due to Mr Deon Madyo of approx R8-million (VAT included) … This commission is due for the provision of eight Wataka’s [purifiers] to the Northern Cape.”
In the state’s court papers, investigators recorded an interview with Intaka’s financial manager, Adriaan Laubscher, who also alleged the company had agreed to pay Madyo R8-million in “undue payments”, although it appears this was never paid.
In his statement, Hawks investigator Roelof Bruwer said: “The reason for Madyo’s failure to claim and collect the said payment are very clear, i.e. he was clearly aware of the unlawfulness of the said payment and that is precisely the reason why he did not collect it.”
However, investigators did trace an amount of R672 269 that Intaka paid to a company of Madyo’s. He has been charged with corruption in connection with both amounts.
The M&G also recently revealed details of Madyo’s role in a controversial psychiatric hospital project in Kimberley.
Madyo played a hands-on role in establishing the hospital project, after which he left the department and joined a private company that allegedly stood to benefit from the development. The company denied this.
Approached for comment, a health department spokesperson said: “The Intaka court case is still pending, as it is not yet finalised.”
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