All not well at private KZN hospital

A Pietermaritzburg private hospital at the centre of a tax evasion scandal is also under investigation by the Directorate for Priority Crime Investigation (the Hawks) over claims that its owners bribed health department officials to overlook registration deficiencies.

Daymed Private Hospital and its owner, Navind Dayanand, were charged with multiple counts of tax evasion, pay and you earn tax and refund fraud last month, over which the doctor and his wife Nerupa, the hospital’s financial manager, and several former staff members, are out on bail.

They appear again in February.

Dayanand is also being investigated by the Hawks for an alleged R100 000 bribe paid to former health department officials to facilitate the hospital’s re-registration in 2015, after his former accountant, Brendan Pillay, turned whistleblower allegedly in retaliation for being fired.

An internal investigation appointed in 2017 was unable to prove that the R100 000, R50 000 of which was paid by Daymed into an official’s mother’s bank account, was a bribe because of capacity constraints preventing them from taking the matter further.

The health department then asked the police to investigate the corruption claims.

The department also investigated the appointment of Dayanand’s son, Reshal, as a doctor at the Northdale Hospital in 2015, finding that he had lied about his qualifications, which were never subject to verification, and had not completed his medical degree at the time.

Reshal Dayanand is also being investigated by the Hawks for qualification fraud, after both the University of KwaZulu-Natal, from which he claimed to have a medical degree, and the health department laid charges against him.

University investigators had to be given bodyguards and moved to safehouses at a cost of R30 million after they received death threats for their investigation into Dayanand and other alleged degree fraudsters implicated in the investigations, dubbed Operation Clever by the authorities.

Four years later, neither father nor son has been charged over either act of alleged corruption, despite the “ongoing” investigations by the Hawks and the National Prosecuting Authority (NPA).

Navind Dayanand claimed he was the victim of a vendetta by Pillay, who he had fired for alleged qualifications fraud and who had, in response, presented dossiers about alleged corruption at Daymed to the authorities to try to put him out of business.

Dayanand, a prominent member of the Pietermaritzburg medical fraternity who started Daymed, of which he is sole proprietor,  in 2003, said the bribery allegations and the charges laid against him by the tax authorities were “nonsense”. 

Dayanand has been involved in a series of court battles with Pillay — who, according to court papers, is a witness in the South African Revenue Service case — and with self-styled whistleblower Visham Panday, who his legal team this week described as “vexatious litigants”.

According to a confidential 2018 report by the department of health risk assurance management services, which the Mail & Guardian has seen, their investigation was also triggered by a fraud and corruption complaint laid by Pillay.

The report said the accountant claimed that Daymed failed a re-licensing inspection in February 2015 and subsequently paid the R50 000 of a R100 000 bribe into the bank account of a licensing official’s mother to facilitate re-licensing.

Pillay also tipped off the Health Professionals Council of South Africa (HSPCA) and the health department about Reshal Dayanand’s bogus qualifications and the employment of an unregistered Cuban doctor at Daymed for nearly 15 years, who was paid under a false identity.

Dayanand senior was charged by the HPCSA and pleaded guilty, paying a fine of R15 000 last year.

Licence drama 

According to the health department’s report, Daymed’s licence was suspended in February 2015 and reinstated, subject to implementation of a plan to address the deficiencies, in July 2015.

Although there was no documentation to indicate that the deficiencies had been “cleared or resolved” by the time Daymed was re-licensed, there were “no favours that could be identified in the issuing of Daymed Hospital licence for 2015/2016”.

The health department investigators were unable to interview the official who allegedly received the bribe because the person had resigned in July 2016.

“Notwithstanding information that can be discovered by criminal investigation, internal

investigation could not establish [an] obvious link between the timing of the transaction and subsequent issuing of Daymed Hospital licence,” it said.

It recommended that the department conduct unannounced, independent inspections at Daymed.

It also recommended that the department assist Pillay in laying a complaint with the police and that the department’s investigating team “assist the [police] with the criminal investigation(s) until completion”.

Bogus doctor

The report said Reshal Dayanand had been appointed as an intern at Northdale in January 2016, where he worked until March 2017, when the hospital was informed of his deregistration by the HPCSA

According to the report, meetings with the police and the HPCSA failed to establish who had verified Dayanand’s qualification, but confirmed that Dayanand had “submitted a fraudulent academic record when he was employed or during his employment by the KZN [KwaZulu-Natal] department of health”.

A separate fraud charge had been laid against Dayanand over the R637 087 he had earned from the health department and was being handled by the team investigating the qualification fraud.

It recommended that the department ”should develop a framework [or] guidelines that include verification of qualifications as part of revising the recruitment process of medical interns”.

Hawks investigation

University of KwaZulu-Natal communications head Normah Zondo said the Reshal Dayandad matter had been reported to the police and that “a criminal case was opened by the university. The Hawks and the NPA are currently investigating this matter.”

She said the threats directed against the university’s investigators “were not necessarily linked or limited to the investigation of the Dayanand matter alone” because “there was a wider investigation into admissions at the time”.

Zondo said Dayanand had lodged an appeal and had also applied for admission to the university to complete his studies, which UKZN was “giving consideration to”.

The health department said Reshal Dayanand had been placed as a medical intern and did not have a pension that the department could recover in lieu of the salary he had earned fraudulently at the time he left the department’s employment.

“The department then sought the involvement of the police to recover the monies because its own scope of investigation had limited powers in probing such matters,” spokesperson Ntokozo Maphisa said.

Maphisa confirmed that the department had investigated the alleged bribe by Daymed and had found “no proof and link”. They had then handed the matter over to the police.

Hawks spokesperson Captain Simphiwe Mhlongo said that investigations into charges laid by the department of health and the university were ongoing.

Dayanand’s legal team, through lawyer Carlos Miranda, said the legal woes of father and son were directly related to Pillay’s “campaign” against them, which had been sparked by his dismissal.

Miranda said the health department report was not authentic, was “one sided” and a “real shocker” and that the investigators who wrote it had since been dismissed by the department.

Miranda said the R50 000 payment to the official’s mother had been for “catering” and “kitchen stuff.” 

He said Reshal Dayanand had not done anything wrong and had followed the department of health registration procedures by applying for his choice of placement online ahead of graduation.

“The department of health is completely incorrect. The department of health is trying to cover their backs. They did not give him the requisite notice period and merely took the say so from the HPCSA and UKZN. They [the health department] are facing a potential damages claim,” Miranda said.

He added that Reshal Dayanand was “never informed” by the university that there was a “clinical component” to complete.

He had lodged an appeal against the university’s decision and had also applied to the university to complete the final module.

Miranda said the university had provided protection for its investigators who were looking into broader claims of corruption and not for those who were investigating Reshal Dayanand’s case.

He said they would bring an application against the NPA to force them to finalise the investigation so that Reshal Dayanand could “get on with his life”.

In court papers filed last month in a successful application to have a warrant of arrest based on charges laid by Dayanand quashed, Pillay said he had been “harried” by the NPA and it had adopted a “reticent” stance towards both Dayanands.

“The Dayanands appear to have completely eluded accountability for far more serious transgressions by virtue of their power and influence,” Pillay said.

 “To this end we caution the NPA to — and we do so earnestly — if prosecutorial discretion continues to be applied so iniquitously, justice will be seen as no more than an indulgence of the rich and a mere reverie of the poor.”

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