A day after one of the hidden investors in Vitals Global Healthcare took legal action to try to stop the sale of the Malta hospitals concession to Steward Healthcare, a meeting was held at Castille among the investors with the Prime Minister’s Chief of Staff Keith Schembri and Tourism Minister Konrad Mizzi who had negotiated the deal, sources have confirmed.
Present at the meeting with Schembri and Mizzi was Ashok Rattehalli, the VGH investor who filed a warrant of prohibitory injunction on 19 December in an attempt to stop the sale to Steward Healthcare, as The Shift revealed.
Mizzi negotiated the deal with VGH as former Health Minister also responsible for Projects Malta. Despite the change in his portfolio, he retained control of Public Private Partnerships such as the hospitals deal.
The meeting was held on 20 December, a day after Rattehalli submitted the documents in Court, a move that threatened to delay the deal.
Rattehalli’s documents show he was promised a seat on the Medical Board as well as in the Operating Management Team. On top of that, he was promised 5% of the shares in Vitals Global Healthcare (VGH) that would kick in once the agreement with the government was signed.
The documents also show the investors had signed a secret agreement with the government months before the call for proposals was made.
Rattehalli did not get what he was promised so he turned to the courts to try to stop the deal to protect his interests, because if the sale with Steward Healthcare went ahead he risked losing what he was entitled to under a complex web of company structures created to hide interests.
The day after the meeting held at Castille, on 21 December, Vitals filed what is known as a counter-warrant requesting Rattehalli’s warrant of prohibitory injunction to be withdrawn. Rattehalli did not pursue further action on the request he had filed in Court only two days earlier.
In fact, on 9 January – at what must have been a brief sitting given that only the Vitals’ lawyer turned up – the Court noted in not so many words that the matter was closed.
When revealing that an investor had tried to stop the sale, The Shift had questioned what had led to Rattehalli’s sudden change of mind.
The Shift has shown that financial trouble hit VGH last summer after further investigation into Rattehalli’s documents led to a trail and documents in the British Virgin Islands.
One of the companies at the top of the chain of VGH’s hidden ownership structure – Asia Harimau Investments Limited, which belongs to Mark Edward Pawley (one the directors of VGH) – faced bankruptcy charges in the British Virgin Islands in August last year.
It risked bringing everything down. A number of interests were at stake, and with possible severe repercussions on Malta’s national health service.
Health Minister Chris Fearne had said discussions to sell Vitals to Steward started three months before the December announcement. This places the start of discussions in September, the month after legal action against one of the investors was taken in the BVI Court.
Prime Minister Joseph Muscat acknowledged in Parliament last week that Schembri and Mizzi were involved in the final stages of the deal in the transfer of the hospitals concession. Muscat was replying to a parliamentary question by PN MP and former Opposition Leader Simon Busuttil.
“The Prime Minister confirmed, and this is something we are now learning, that even in the deal occurring in recent days regarding VGH transferring to an American company [Steward Healthcare], Minister Konrad Mizzi and the Prime Minister’s Chief of Staff Keith Schembri were involved. We did not know this. I hope that the Deputy Prime Minister, who is also Health Minister [Chris Fearne], explains the involvement of Mizzi and Schembri so VGH can transfer its concession to an American company,” Busuttil said.
This week, The Shift has revealed the hidden owners behind Vitals Global Healthcare – some with long-standing political connections in Malta, how interests were hidden and what seems to have prompted the surprise decision to sell their concession to Steward Healthcare. The investigation was based on court documents filed by one of the investors in Vitals who tried to protect his interests by stopping the transfer.