Cocoon SDA Care founders were behind firm that failed NDIS audits

A company linked to two men behind troubled disability care provider Cocoon SDA Care failed multiple NDIS accreditation audits four years ago.

Cocoon SDA Care co-founder Zaffar Khan.

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A company linked to the two men behind troubled disability care provider Cocoon SDA Care failed multiple NDIS accreditation ­audits four years ago, and was subsequently rejected for re-­registration.

Critical risks were identified in 2021 in the services being offered to people with disabilities by Connecting Abilities Australia Pty Ltd, according to documents sighted by The Australian and sources who spoke on condition of anonymity.

Up to 16 major and serious faults were detected in one audit of the business, with a follow-up audit discovering many issues had not been fixed months later.

Cocoon SDA Care co-founder Muhammad Latif at his Sydney home. Picture: Julian Andrews.

This resulted in independent auditors telling the NDIS Quality and Safeguards Commission that Connecting Abilities was not recommended for accreditation.

The business was rapidly expanding at the time, offering services to people on the NDIS in Victoria, Queensland, South Australia and Western Australia.

It was previously known as Melbourne Carers but was bought out in 2020 by one of Muhammad Latif’s companies.

Mr Latif and former taxi driver Zaffar Khan are co-founders of Cocoon SDA Care, a business facing major investigations into its operations.

Despite the serious accreditation failures at Connecting Abilities, Cocoon’s parent company Horizon Solsolutions Australia was able to rake in more than $100m in NDIS support services funding in 2023 and 2024.

A person familiar with the NDIS audit system said Connecting Abilities’ high number of faults, known as “major non­conformances”, was extreme and alarming. “Normally, if somebody gets two, that would be considered as fairly serious; 16 is nuts,” the person said.

During the audit process, it was discovered that there were many more sites than had been initially advised, and also more NDIS participants. This was of crucial relevance because the number of people on the NDIS with any provider helps determine how many participants are interviewed by auditors.

Significant turnover of key staff members including senior managers was also noted, as was Mr Khan’s move from an apparent executive chairman role to a contractor providing strategic advice.

Among many issues identified by auditors was the lack of evidence of risk management, including risks to vulnerable people with disabilities.

Policies and procedures were not suitable for the scale of the business and the complexity of the services it offered, and there was no disaster plan or business continuity plan, auditors found.

There were concerns about the management of medication incidents, the monitoring of medication errors and the lack of procedures for administering laxatives, enemas and suppositories.

Claims in the company’s manual that its staff would have certain medical knowledge were not backed up by documented evidence of training.

The NDIS commission refused Connecting Abilities Australia Pty Ltd’s application for renewal of its registration in March 2022, The Australian has been told. The commission has declined to comment, saying an open investigation is under way.

The former owners of Melbourne Carers were Victorian couple Hakan and Demet Aydan.

Mr Aydan on Monday told The Australian that when he advertised the business for sale in early 2020 during the Covid pandemic, it had five clients.

“I think we put it on Gumtree or somewhere. After a few offers, this guy didn’t even negotiate, he paid the deposit straight away over the phone,” he said.

Mr Latif bought the business, but a man named “Zaffar” was also involved in the purchase, Mr Aydan said. “My wife … spoke to Zaffar a few times after the sale because he wanted to employ her as a manager to look after SDAs (specialist disability accommodation),” he said.

The business passed an NDIS audit shortly before the sale, Mr Aydan said. “We got audited, everything was fine. Obviously in that line of business, you can’t just get anyone to audit, you find one of the NDIA’s (National Disability Insurance Agency’s) approved auditors. We were just a small, simple, basic business.”

Mr Khan and Mr Latif have denied any wrongdoing.

Asked last week if Cocoon was deliberately overcharging the NDIS, Mr Khan said: “Never. Not even 1 per cent. Not even one cent. Not even $1. No one can prove it. And NDIS has tried its best.

“We are a pretty transparent company.”

Do you know more about this story? Contact David Murray on [e-mail]