Bail for Panday
AFTER more than two months in detention over tax-fraud charges businessman Thoshan Panday was finally released on bail having raised “new facts” to secure his release this week.
Bail of R100 000 was set at the Durban Magistrate’s Court on Monday, with conditions.
Henry Mamothame, spokesperson for the Investigating Directorate Against Corruption said bail was granted after Panday brought an application on new facts, citing his medical condition, which he alleged was deteriorating owing to prison conditions.
“The court confined him under house arrest and he was ordered to report to his doctor and legal team.”
Panday, 52, was arrested in September on tax-fraud charges and was denied bail because he was considered a “flight risk”.
He was already out on bail for his involvement in the alleged 2010 Fifa World Cup accommodation tender scam worth around R47m, which included racketeering and corruption charges.
Former Kwazulu-Natal police commissioner Mmamonnye Ngobeni, Panday’s family members, his employee and businesses he was associated with are co-accused in the Durban High Court matter.
He travelled to the US in contravention of his bail conditions and is said to have had more than one passport.
In the latest matter it is alleged that Panday attempted to either evade tax, assist others to evade tax, or obtain undue tax returns through misrepresentations he made to the South African Revenue Service (Sars).
He faces 27 charges and the potential setback for the SARS was more than R7 million.
Magistrate Scelo Zuma denied Panday’s initial bail attempt, which he took on appeal to the Durban High Court, where Judge Esther Steyn concurred that the accused was a flight risk.
Panday’s legal team argued that the State latest case was “weak”, the businessman’s physical and mental health had dipped significantly and his continued incarceration could potentially worsen his condition.
Panday’s affidavit said that while waiting for Steyn's ruling, which was handed on November 7, he was supplied with the indictment and a copy of the docket setting out the charges and evidence against him.
Panday said the indictment revealed the State’s “weak case“ and that it was in the interests of justice that he be released on bail.
He said while in custody, his mental and physical health deteriorated drastically to the point that his further incarceration constituted a serious risk to his health.
Panday noticed that the 27 counts he faced were fraud related or alternatively contraventions of the Tax Administration Act 28 of 2011 regarding false information (VAT and Companies Income Tax) supplied, related to the companies listed as accused two to six in the World Cup matter.
“The State persisted with charging me under the TAA that came into effect in July 2012 and does not operate with retrospective effect. The charges in the indictment, which cites contraventions of the TAA prior to July 2012, are fatally defective and will not survive an objection.”
Panday said Judge Steyn also warned the State’s legal team during the appeal attempt that charges under the TAA were fatally defective but they “simply ignored the observation”.
“This is an important consideration for bail.”
He pointed out that indictment and the State’s evidence acknowledged that he was not the director or member of accused 4, 5 and 6.
He said his ex-wife (Privishia Panday) was the member and representative of Valotone 21CC (Accused 4) but it was not explained in the indictment why he should be held responsible for the tax returns filed by the company.
Similarly, Panday said that Arvenda Panday (his mother) was the member and representative of Accused 5 (Bravosat 25 CC) and his brother-in-law Seevesh Ishwakumar was the member and representative of Kaseev Traders CC (Accused 6).
Therefore, they were responsible for tax returns for the respective businesses.
He said Sarika Naidoo and her brother Shikar Panday (the accountant and no relation to the accused) were partners in the accounting firm that managed the books of Accused 2 to 6.
Panday said he asked Shikar Panday to attend the accounting of Gold Coast Trading CC and Unite Mzansi and Projects CC.
He detailed how Shikar visited his business premises once a month to capture all documents, including bank statements, presented to him by Panday’s employee (Tasleem Rahiman), for processing and calculating VAT and CIT.
“Once he (Shikar) was finished capturing, I would authorise the SARS payments. I assumed that the workings he showed me were correct and I accepted them,”he said
Panday said he had no recollection of Shikar loading the Pastel accounting system onto his laptop to capture information.
Accused 2’s offices were raided by the Hawks in August 2010, documents and computers were taken.
Panday pointed out that a forensic expert produced mirror images of all the computers seized but was unable to locate the Pastel software.
“It appears that Shikar did not use my laptop or that of Accused 2 to 6, it would have appeared on the mirror image. I am adamant that none of the computers were tampered with prior to being seized.
“Shikar said that he did not retain any records apart from the one page summaries. There are material shortcomings in the State’s case as there is no record of what he allegedly captured onto Pastel.”
Panday said the two SARS investigators also said in their reports that it was a “serious hurdle”.
When he was initially denied bail, Panday said it caused him “severe mental anguish and anxiety and new medical problems, including chest pains.”
A private psychiatrist attended to him in Westville Prison and recommended that he be hospitalised in a private hospital for tests to be conducted.
He was then moved to Capital Hospital and thereafter to City Hospital, where various specialists consulted with him and provided reports.
Panday believed it was beyond doubt that he was in poor health and required intensive and ongoing treatment.
But Correctional Services decided to move him back to prison on October 19.
Colonel Phillip Herbst presented an affidavit in opposition to bail.
“The location of his treatment should not be an issue. Those charges won't go away if he is released on bail, he will still have the same stress and other symptoms. He just wants special treatment.”
Herbst said Panday was relatively healthy and that his current symptoms are caused by stress.
He said Panday was “running the companies and giving instructions” and they all operated from the same premises.
He maintained that the accountant could only work with information he was given and he was trying to distance himself from the misrepresentations by blaming his family members and an employee.