Glaring contradiction in Steward Healthcare’s defence of hospitals deal: what now?

A critical gap in Steward Healthcare’s defence was exposed after The Shift’s investigation revealed that the hospital operators were attempting to nullify a UK court judgement in favour of Vitals Global Healthcare (VGH) investor Ambrish Gupta by arguing that the deal they acquired from VGH was fraudulent and corrupt.

In a separate, local court case originally filed by Opposition MP Adrian Delia, Steward Healthcare two weeks ago attempted to simultaneously defend their personal track record on the deal by submitting a photo document that was not backed up by financial data such as invoices or audit trails.

This means that Delia’s case, which was originally initiated due to Steward Healthcare’s failure to adhere to the obligations stipulated by the concession agreements, was reinforced by the fact that Steward Healthcare admitted to the deal’s fraudulent nature in a UK court in the case against Gupta. Malta’s own National Audit Office had described the deal as “vitiated and illegal”.

Among Steward Healthcare’s discarded obligations are a promised €200 million investment which never materialised, as well as an overhaul of St Luke’s and Gozo’s general hospitals, which also did not materialise as promised.

“This has now become their defence to rebut the judgement that was handed down with Gupta and MANV,” Delia said, referring to the separate case filed by Steward Healthcare in which the company is accusing Gupta and MANV (Medical Associates of North Virginia Inc.), a company linked with Gupta, of collusion with the Maltese government.

“What I did is bring that same defence into my case by saying that similarly, if the foreign judgement cannot be executed because the deal is corrupt, then Steward shouldn’t be paid and the contract should not be continued,” Delia said.

Two weeks ago, the Nationalist Party also filed a judicial protest against the government authorities involved in the decision to award the concession to Steward Healthcare in an attempt to hold them “legally and politically accountable” following reports that the government intends to give Steward Healthcare a €20 million a year hike in funding, over and above the €50 million they are already getting.

Asked whether the PN’s repeated calls for cross-party collaboration to ensure the deal is revoked and the company does not avail itself of a €100 million buy-out clause signed by disgraced former Health Minister Konrad Mizzi in 2019 have been met, Delia responded in the negative.

“I’m trying to clearly tell the government to not oppose us by saying that the contract is correct because if they do so, when Steward Healthcare turns on them for those €100 million, the government won’t be able to defend its argument,” Delia said.

“If the government instead chooses to do as I’m doing by pushing the fact that Steward Healthcare not only failed to fulfil their obligations but are also now admitting that the deal is fraudulent, then there is no claim to those €100 million and the contract can be terminated,” he added.

Fundamentally, the situation following The Shift’s investigation leaves Steward Healthcare with no leverage to negotiate given that such a provably fraudulent contract automatically denies it legitimacy in the eyes of the law, especially considering Steward Healthcare’s lack of evidence in proving they delivered on their promised investment.

Besides multiple court cases involving Steward Healthcare, investors linked with the concession and the Maltese government, UĦM (‘Malta Workers’ Union’, Unjoni Ħaddiema Maltin) also filed a judicial protest on 18 November against the permanent secretary for the Ministry of Health and the CEO of the Foundation for Medical Services due to the government’s failure to adequately make payments in arrears to former Steward Healthcare professionals when they were integrated into the foundation, breaching the conditions of an agreement that had been signed.