A very dirty plan – Kevin Cassar

On 1 September 2017, Armin Ernst phoned Keith Schembri while in New York accompanying then-prime minister Joseph Muscat on an official UN visit. Ernst had an important message for Muscat.

Steward wanted to take over the hospitals’ concession from Vitals. There was one problem.  Ernst was Vitals’ CEO. Why was he proposing Steward as the new hospitals’ concessionaire?

Ernst was responsible for the day-to-day management of the Vitals’ concession. Instead, he actively undermined his employer, Vitals, to benefit his previous employer, Steward, according to Ram Tumuluri’s whistleblower filing in the US.

Ernst allegedly broke his contractual obligations and worked for Steward while employed by Vitals. According to the VGH Director, Ernst even sent defamatory correspondence about Vitals to Deutsche Bank, which was about to provide Vitals with financing, scuppering the deal.

Ernst was Steward’s Chief Administration Officer between April 2015 and June 2016. In July 2016, he became Vitals (VGH) CEO. He only worked for five months. When Vitals realised Ernst was up to no good, he was put on “leave of absence for breaking contractual obligations”.

In August 2017, Ernst stepped down from Vitals and, in September, requested Vitals waive his “non-compete clause” to allow him to work for Steward. But he was already communicating with Schembri on Steward’s behalf.  Vitals rejected Ernst’s request. That didn’t stop Ernst from becoming Steward Health Care International President in September 2017.

Here was a devious double-dealing traitor, precisely Joseph Muscat’s type. Sure enough, Muscat took to Ernst right away.

After the New York meeting, Muscat ordered his fixer, Konrad Mizzi, to meet Ernst in London. That meeting took place on 8 or 9 November 2017.  The exact date is unclear. The government kept no records.  The Auditor General repeatedly requested documentation about the government’s negotiations with Steward – none was provided.

Muscat had good reason to conceal those meetings.

The initial meetings held with Ernst between September 2017 to January 2018 were held outside Malta to ensure nobody found out.

Like that notorious Baku meeting with Ilham Aliyev, no civil servants attended. Keith Schembri and Konrad Mizzi represented the government, accompanied by Mizzi’s lawyers, Mifsud Bonnici Advocates. Ernst represented Steward. They were hatching a new plan – a very dirty plan.

By 20 December 2017, Ernst wrote to Schembri that “SHC (Steward) had foregone undertaking due diligence”. Schembri and Ernst secretly agreed that Steward, which was about to take over a €4 billion concession, wouldn’t bother with any due diligence. They conspired to bury the rotting corpse. Nobody would find out about Muscat’s shameless deals with Vitals.

Steward’s own legal advisors couldn’t believe it.  They questioned, “on what basis was SHC willing to take over this concession?” Steward’s General counsel admitted Steward didn’t have enough information “to make an informed decision at this stage”. But Ernst, Schembri and Mizzi sealed the deal on Muscat’s instructions.

On 27 January 2018, Ernst e-mailed Schembri, copying in Shaukat Ali and his son Asad Ali. Ernst insisted that government would have to protect Steward for all Vitals liabilities, which eventually amounted to €62 million.

He decided Steward wouldn’t provide a €9 million performance guarantee, as obliged,  and instead would provide a letter from Steward. He stated that key elements of the contract for the takeover would be left open and resolved later.

The National Audit Office immediately smelt a rat. Why were Shaukat Ali and Asad Ali included in this correspondence? The Director of Vitals informed NAO that Keith Schembri had insisted that Shaukat Ali, a signatory of that secret 2014 MOU, should be ‘recruited’ by Vitals.

On Schembri’s “recommendation”, Shaukat Ali was recruited as a “general consultant”.  Shaukat Ali then demanded his son, Asad, be recruited. So Asad became a “public relations and marketing consultant”.

Shaukat Ali claimed he was Joseph Muscat’s unofficial advisor. Ali and his family extracted millions from Vitals and Steward through payments into their personal accounts and companies. Shaukat Ali, his two sons, Asad and Wajid, and his wife and daughter all received payments.

Millions continued to flow to the Ali family once Steward took over.  Steward paid €1.2 million into Asad’s company, Eurasia. This was labelled as payment for “medical supplies and computer equipment”.

But Asad was Vitals PR and marketing consultant. Why was Steward paying him for medical supplies? Eurasia never filed audited accounts, as obliged, for seven years.  Asad received another €450,000 from the taxpayer-funded concession in expenses, salary and consultancy fees.

Oddly, his son Wajid was employed by Steward as a consultant and received payments from Steward too.

Shaukat Ali received €1.4 million into his UAE company, Mount Everest FZ,  from Vitals’ Bluestone investments. Fakhra Shaukat Ali received €125,000 from Vitals. She received another €300,000 from Mount Everest FZ. Inexplicably, Steward paid Ali’s other wife, Aasia €70,000.

Armin Ernst got everything he wanted. Or rather, Muscat conceded everything to Steward.

Steward’s €9 million performance guarantee was waived repeatedly. Steward’s obligation to provide proof of financing was waived.

The government guaranteed over €36 million in Steward BOV debts. Muscat provided it with the obscene €100 million default clause.

Muscat conspired to double Steward’s payments before his disgraceful exit. He then accompanied Ernst at his first meeting with Prime Minister Robert Abela, who then repeatedly waived Steward’s obligations. Abela kept funnelling millions into Steward. Abela took good care of Muscat’s deeply vested interest in Steward to the nation’s detriment.

Shaukat Ali, his two sons and his daughter all received payments from Accutor. So did Ram Tumuluri. And so did Joseph Muscat.  Muscat was to receive €540,000, with the possibility of extending his ‘consultancy’ indefinitely. Muscat was sorted for life. That money came from Steward, which paid Accutor €3.6 million.

But Muscat claimed he wasn’t aware Steward funded Accutor. He claimed he wasn’t aware Shaukat Ali and his son Asad were also Accutor consultants.  But then Muscat didn’t know about 17 Black either. He couldn’t remember when he last met Yorgen Fenech.