Millions of euros were earned from Vitals in days of government payments
Large amounts of money were being carried by Vitals on the same days it was receiving payments of millions of euros from the government, documents show.
Corporate records analyzed by Times of Malta points to a trail of government funds flowing into Vitals Global Healthcare Management, before then being returned to the leading Maltese company, Bluestone Investments.
Sometimes, money was being withdrawn from Vitals on the exact same day it was paid by the government.
It is not clear why government money intended to finance the running of the hospitals was being transferred from the Vitals franchise company to Bluestone, whose own ownership was placed behind a company in the British Virgin Islands.
Bluestone, whose directors were Vitals frontmen Ram Tumuluri and Mark Pawley, have only ever presented one set of audited accounts for the year 2015, a year before government funds began to be transferred to it.
More than €21m sent to Bluestone
According to the concession agreement, it was Vitals, not Bluestone, who were contracted to take over the hospitals and pay their running costs, with those same costs in turn billed to, and funded by the government.
Indeed, large costs such as staff salaries linked to the management and administration of the Karin Grech, San Luqa and Gozo hospitals were all paid by the Vitals franchise company, not Bluestone.
More than €21 million was transferred from Vitals to Bluestone between 2016 and the first two months of 2018.
These payments, which were mainly in round figure amounts, were divided into more than 70 different transactions.
It seems that the payments ended a few days before the American company Steward Healthcare bought the franchise from Vitals.
A spokesman for Steward, which took over Vitals Global Healthcare Management, said Steward had “no comment” on the €21 million in payments to Bluestone, when contacted earlier this month.
The Joseph Muscat link
Tumuluri has consistently denied profiting from the government contract or withdrawing any money from the concession.
“Instead, Mr. Tumuluri chose to defer his salary to support the franchise’s operations,” his lawyer said in a statement this month.
Swiss accounting records show that Bluestone will continue to pay approximately €300,000 to Acccutor AG, the same Swiss firm linked to suspected transactions with former Prime Minister Joseph Muscat.
Accutor also received millions from Steward as part of the deal to buy the franchise from Vitals.
Muscat’s home and publicly funded office were searched in January in connection with Acccutor AG payments he received in 2020.
He denies any wrongdoing, saying Accutor’s payments were for legitimate consulting work.
The former directors of Accutor AG Kamal Sharma and Tyrone Greenshields said Times of Malta in November they exited Accutor in 2019, after becoming aware of “unexplained” and “concerning” financial activities that were being carried out behind their backs.
Auditor General, Steward concern
A report by the National Audit Office concluded that Vitals should have been barred from winning the concession, due to previous “collusion” with the government of Muscat on the €4 billion contract.
Auditor General Charles Deguara also stated that the changes in the concession agreement “consistently and uniquely favored the interest of Vitals”, with the government becoming “impotent” to hold the concessionaire accountable.
Steward Malta repeated this concern in February, saying that Vitals were left “with” “massive amounts of taxpayers’ money” by the government.
“It is no secret that Vitals, under the strict control of its owners, had not fulfilled its obligations nor had the government asked them to do so. Not only that, there were no funds left for the salaries of the medical and non-medical staff working in the hospitals,” said the CEO of Steward Malta, Nadine Delicata.
Vitals’ CEO at the time, Armin Ernst, became president of Steward International shortly before the American company bought Vitals.
According to Delicata, who was also a senior official of Vitals, the situation of the company was not known by its management team, as they were not allowed visibility of the finances by the owners of the company.
A magisterial inquiry into the hospital agreement has been ongoing since 2019.
Money flows
On 26 September 2016, Vitals Global Healthcare Management received a government payment of €5 million, a few months after formally taking over the management of San Luqa, Karin Grech and Gozo hospitals.
That same day, €3.5 million was sent to Bluestone by Vitals.
Three days before Christmas of that same year, a government payment of €3.6 million went to the Vitals. That same day, Vitals made a payment of €3.4 million, converted into dollars, to Bluestone.
On two other occasions that same month, large payments were made to Bluestone within days of Vitals receiving government money.
For example, on 2 December 2016, the government transferred €4.5 million to Vitals. Between the sixth and seventh of that same month, €3.5 million made their way from Vitals to Bluestone.
The trend continued in 2017, the same year that Vitals exited the franchise, leaving behind over €36 million in debts after the franchise went into financial ruin.
A government payment of €6.8 million on 6 April 2017 saw €1.3 million transferred to Bluestone between 10 and 18 April.
A further €4.5 million was paid to Bluestone between 14 July and 31 July, with the government paying €11.4 million to Vitals on 14 July.
Times of Malta reported this month how Vitals shareholder Shaukat Ali, along with his family, milked millions from the franchise, including through payments originating from Bluestone.
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