NDIS watchdog warns against places like Cocoon SDA Care sending clients to its related Crescent entity

An NDIS watchdog has called out suspended Cocoon SDA Care for its actions after it gave severely disabled clients advice on where to go next.

EXCLUSIVE: Banned NDIS provider Cocoon SDA Care is encouraging severely disabled clients to transfer to a company whose new owner is one of Cocoon’s most senior executives.

Cocoon clients have to change providers because of its temporary suspension by the NDIS watchdog and some have received letters from the company telling them their support services are being transitioned to a business called Crescent.

The letter claims the aim is to “enhance service efficiency” and makes no mention of Cocoon’s 30-day ban over serious safety worries flagged by the regulator.

The letter says the transition involves a “change of management”.

What the letter does not say is that, last month, Crescent’s ownership was transferred to Cocoon’s executive director Pranay Kumar.

Cocoon SDA Care's executive director operations Pranay Kumar, left, and co-founder Muhammad Latif at an Australian Financial Review event in 2024 where the company was named one of the fastest growing in Australia. Picture: Facebook

NDIS certification company Ethical Tick said Cocoon’s shift to Crescent “highlights critical flaws in the system – where suspended providers can effectively redirect participants to related entities, raising serious concerns about accountability and transparency”.

Mr Kumar took ownership of Crescent from the former personal assistant to Cocoon’s controversial corporate strategist Zaffar Khan, an ex-bankrupt.

Asked about the shift from Cocoon to Crescent, and the concerns raised by Ethical Tick, Mr Khan said: “We remain absolutely committed to NDIS participants being empowered by having choice and control in their lives and that is exactly why our letter directly informed them that this was an offer which they were under no obligation to accept.

“Our communication was direct, transparent, and respectful of participants’ rights,” Mr Khan said.

His personal website describes Crescent as being part of the Cocoon group.

Mr Kumar was Crescent’s sole director until earlier this month. He was contacted for comment, and said he had “lost his job”, without providing further explanation.

Earlier on Wednesday, Cocoon had said he was still executive director.

Last year he was pictured with Cocoon’s owner and sole director Muhammad Latif celebrating Cocoon being named by the Australian Financial Review as one of the nation’s fastest-growing businesses.

This masthead recently revealed Cocoon’s parent company, Horizon SolSolutions, was issued with a bankruptcy notice last year over a $10 million tax debt. The notice was withdrawn after a payment plan was agreed to with the ATO.

Cocoon SDA Care’s corporate strategist Zaffar Khan. Picture: Supplied

The watchdog of NDIS service providers, the Quality and Safeguards Commission, is officially investigating Cocoon and Horizon. Its probe is understood to include scrutinising the restructuring moves. The commission declined to comment on the record.

The commission suspended Horizon’s registration for 30 days from last Friday. That has left as many as 438 severely disabled people needing to find new providers. Some have had to move from homes run by Cocoon.

Asked about Cocoon’s shift to Crescent, the body that oversees the NDIA – the National Disability Insurance Agency – said “it’s critical that participants are protected from unscrupulous providers and the NDIA works closely with relevant authorities to identify and act in these circumstances”.

The NDIA recently stopped paying claims by Cocoon while it conducts a manual review.

Mr Khan’s PA was owner of Crescent for three weeks until Mr Kumar took ownership on April 8.

Prior to her ownership, all of Crescent’s shares were held by Horizon SolSolutions’ parent company.

Originally published as NDIS watchdog warns against places like Cocoon SDA Care sending clients to its related Crescent entity