The KwaZulu-Natal Asset Forfeiture Unit (AFU) has obtained an interim restraint order to the value of about R37,2m against Daymed Private Hospital. In addition, they want to secure assets worth over R2m from Dr Navind Dayanand.

The hospital is the first respondent in a matter, in connection with allegations of tax fraud against Dayanand and his wife Nerupa.

According to the National Prosecuting Authority’s Natasha Ramkisson, the state alleges that the Dayanand couple acted together and with others, to defraud the South African Revenue Service (SARS).

“False Corporate Income Tax (CIT), Value Added Tax (VAT) and Personal Income Tax (PIT) returns were [allegedly] submitted to SARS so that the doctor and the hospital could obtain undue tax refunds and/or not pay due taxes to the value of about R39m.

“The assets stipulated in the order include items from the hospital such as furniture, vehicles, computers and electrical, medical and electronic equipment. The order also mentions immovable properties.”

She says the case will return to court on February 24 for statements and for all the accused to appear in court.

According to the court order, the Dayanads have until March 1 to present reasons why the order should not be finalized.

The order prohibits the respondents from dealing in any manner with the named assets.

“This order was granted a few weeks ago by the Pietermaritzburg High Court. Basically, what this [interim restraint] order means is that the assets will be kept under curatorship until the order is made final.

“Remember there are various stages with the AFU application. You have an interim restraint order [the current one in place] and this order gets confirmed and it becomes a restraint order with the next order being the confiscation order and lastly the forfeiture order, which is the last in the series of orders where the assets are forfeited to the state,” says Ramkisson.

The Witness reported in November last year that the prominent Dayanand initially faced over 51 charges worth over R2,1b.

The hospital was charged with CIT fraud, VAT fraud, and PAYE credit fraud with an actual prejudice of approximately R37m to SARS and a potential prejudice of R498m for PAYE.

Dayanand was charged with PIT fraud and VAT fraud to the value of R142m and PAYE credit fraud with the potential prejudice of R637m to SARS.

Nerupa was the company’s financial manager and was allegedly involved in the hiring and dismissal of accountants engaged to submit tax returns on behalf of the doctor and Daymed.

The alleged offences took place between 2012 and 2020.

According to court documents for the state, there were seven CIT returns submitted by the hospital for the February 2014 tax period. During audits of the tax periods, it was discovered that the hospital had understated its taxable income tax.

It is alleged that the hospital submitted a total of 55 tax returns for the February 2014 tax period, and during an audit, it was discovered that the hospital had under-declared its sales and overstated its input tax.

As a result of the misrepresentations made by the hospital, it is alleged that SARS suffered actual and potential prejudice of over R28.7m, and R498m in respect of CIT; and R8.4m and R858.3m in respect of VAT.

According to the document, Dayanand submitted 22 personal income tax (PIT) returns to SARS for his own personal income tax.

It is alleged that during an audit of the tax returns submitted, it was discovered that Dayanand had under-declared his business and employment income, failed to declare interest and investment income and in certain income tax returns, had claimed false PAYE credits.

The audit on his PIT determined that the misrepresentations made by Dayanand in the various income tax returns submitted caused actual and potential prejudice to SARS in the amount of over R2m and R6.3m respectively, reads the court papers.