Hospitals concession instrument for money to pass from ‘state pockets’ to VGH, Steward

Tista taqra dan l-artiklu bil-Malti.

The Court of Appeal on Monday confirmed the shady 2015 multi-billion-euro deal through which three public hospitals were transferred to Vitals Global Healthcare and Steward Health Care to the detriment of Maltese taxpayers.

In a hard-hitting decision, confirming the first one issued earlier this year, the Court of Appeal, presided by Chief Justice Mark Chetcuti, reiterated that the deal was “a simulation”, intended to pass funds from state coffers to private persons, rather than to benefit Maltese healthcare.

Confirming the revocation of all the contracts signed in 2015 on the direct instructions of disgraced former prime minister Joseph Muscat and his collaborators, the Court also increased the weight of its decision, ordering the Maltese government to fork out part of the court fees in the first case, as it was part and parcel of this “very suspicious” deal.

“The Court (of Appeal) notes that there was collusion between VGH/Steward and top officials of the Maltese government to enter into simulated contracts intended not to provide medical care but for other reasons.”

Noting that from day one, it was evident that what would be agreed could not be delivered, the Court said that it was mysterious why no due diligence was conducted, both by Steward and particularly by the government, despite it having engaged audit firm RSM in these discussions.

For many years, RSM carried out the auditing of the Labour Party.

The ruling once again confirmed that “despite paying many millions through taxpayers’ funds, none of the milestones set in the original concession were reached, the government again colluded with the private investors and made their life easier despite breaching all the concession rules.”

“The reaction of those who were obliged to look after the country’s interests (the government) when milestone after milestone was not reached was not to seek remedies but to keep giving extensions to VGH and Steward without them giving anything back.”

The government “continued to pay millions to the concessionaires so that, instead of showing that the agreement was not working, gave the impression that everything was ok”,” the Court said.

The Court denounced Deputy Prime Minister Chris Fearne’s statement that the transfer to Steward Healthcare was “the real deal”, saying the evidence “confirms the suspicion that the intention behind this concession was not a better medical service but an instrument through which money could flow from the country’s pockets towards those of VGH and Steward.”

Signed in 2015, the VGH deal raised suspicions from the start as it was signed hastily after a ‘secret’ agreement, later published, before the original tender was even issued.

Run by VGH and Ram Tumuluri, utterly unknown in the medical field with shady shareholders in many jurisdictions, mostly tax havens, the concession was a non-starter.

Furthermore, despite the millions of euro paid to it by the government, VGH went bankrupt soon after.

However, instead of pulling the plug, the government still approved the concession to be ‘sold’ to Steward Health Care (which paid €1) instead of regaining possession of the Gozo Hospital and St Luke’s and Karen Grech in Malta.

It was only through a long-drawn-out case instituted by Nationalist Party MP Adrian Delia, at the time leader of the opposition, that the court rescinded the concession and returned the three hospitals to the Maltese public.

Ironically, the government conducted talks on the transfer of the concession with Armin Ernst, the CEO of VGH, who then switched to CEO of Steward.

Meanwhile, a criminal inquiry on this deal started in 2019, investigating various Labour Party government members, including disgraced former prime minister Joseph Muscat, is ongoing.

The Shift has also revealed how, in 2020, Prime Minister Robert Abela had already agreed to renegotiate a new agreement with Steward but was stopped at the eleventh hour on the advice of the State Advocate and the Department of Contracts that what he was negotiating was illegal.