Dr Manilall Maharajh moved to Australia five years ago, still in a secret affair with a depressed and suicidal young woman he had treated in NZ, the Courier-Mail reports.
Licensed to practice psychiatry in Australia, Dr Maharajh gained employment with Caboolture and Redcliffe Hospitals in 2011 and became staff specialist psychiatrist in January 2012.
However, when Queensland Health hired him, health regulators in NZ had already investigated a complaint from his former patient and had even briefed the Australian Health Practitioner Regulation Agency (AHPRA) about it.
The Australian health regulator then banned Dr Maharajh from treating women without someone else present at all times.
But his bosses at Queensland Health maintain that even though they were aware of the restrictions imposed by AHPRA, they were not aware of the allegations against the psychiatrist, a Caboolture Hospital spokeswoman said.
In a ruling handed down on November 12, the NZ Health Practitioners Disciplinary Tribunal found Dr Maharajh unfit for psychiatry, saying that he had exploited the anxieties of the young woman, a virgin, "for his own sexual gratification".
The psychiatrist reportedly also tried to thwart the investigation by NZ authorities by paying the woman $35,000 to withdraw her complaint, then accused her of blackmail by making up the sex claims.
As a result of the ruling, Queensland Health last week moved to suspend Dr Maharajh.
No complaints against Dr Maharajh had been made by patients or colleagues at Caboolture or Redcliffe Hospitals, the spokeswoman said.