Former Prime Minister Joseph Muscat’s consultancy contract with a Swiss company suspected of funnelling public funds back to the investors behind the Vitals Global Health Care Group (VGH) is under investigators’ microscope.
The contract was to earn Muscat €15,000 a month for three years for a total of €540,000. It was also to be automatically renewed for another three years before it was suddenly stopped after four monthly payments when Accutor went out of business.
Investigators are also going through broader aspects of Muscat’s finances with a fine-tooth comb. They are additionally looking into the roles that then-health minister Konrad Mizzi and Muscat’s former chief of staff Keith Schembri played in the deal.
Muscat’s income declarations and bank accounts have been analysed by financial investigators in a corruption probe linked to the hospitals’ deal, according to documents obtained by the Organised Crime and Corruption Reporting Project (OCCRP) and shared with partners in Malta – The Shift and The Times of Malta.
In this context, a focus is being applied to whether the consultancy contract Muscat entered into with Swiss firm Accutor after stepping down was simply a kickback vehicle for the public hospitals’ deal.
The €15,000 monthly payments began in the summer of 2020 and stopped after four instalments, worth €60,000, after which the company filed for bankruptcy. It eventually went into liquidation in September 2020.
Just two months after stepping down as prime minister, Muscat received the first of the four €15,000 payments spread over the four months between March and June 2020.
Two came from Accutor, while the other two came from Spring Xmedia AG, another Swiss firm run by the same owner – Pakistani businessman Wasay Bhatti.
The company has also been linked to the channelling of millions of euros in payments linked to VGH and Steward Health Care.
Hidden VGH investor Shaukat Ali and his son Asad Ali, like Muscat, were also put on the payroll of companies owned by Accutor owner Bhatti.
Shaukat Ali, who, like Bhatti, is from Pakistan, told the joint investigation that he was employed by Accutor as a “senior adviser” and that he received salary payments.
Two former senior company employees told the investigation that data was frequently and fastidiously shredded, with bags leaving the Zurich offices regularly.
When contacted, Bhatti did not deny this but claimed, “per strict Swiss privacy laws and given the nature of business including …we had very sensitive data, and there were legal protocols that the team followed”.
Bhatti has owned Accutor AG through bearer shares since 2015, according to a contract obtained by the investigation.
Bhatti also owns Accutor Consulting AG through a similar structure which, until 2018, was named VGH Europe.
The two companies share the same Swiss address with a third Bhatti company: Spring Xmedia, the company that was paying Muscat €15,000 a month for his services.
The companies are all linked. Investigations have uncovered that two of those initial payments were made by a company that was once called VGH Europe AG. The company’s name was changed to Accutor Consulting AG in January 2018, just before Steward Health Care took over the hospitals’ concession from VGH.
As had been revealed by The Shift, Shaukat Ali had signed a secret memorandum of understanding for the hospitals’ concession with the government, which was a fundamental factor in the court’s recent decision to rescind the concessions after finding the deal had been fraudulent from the outset.
Connection to the Chinese-Malta residency programme also probed
According to financial documents seen by the international team of journalists, investigators are also looking into Muscat’s consultancy services for a Chinese-owned, Malta-registered company specialising in servicing visa residency applicants under the Malta Residency Visa Programme – Mediterranean Heart Malta.
Recently-appointed financial services arbiter Alfred Mifsud had, at least in the past, also acted as a consultant for the company.
Mediterranean Heart Malta is owned by JWP Malta Ltd, incorporated in Malta during Muscat’s premiership in June 2017. Muscat once worked for Mifsud at Crystal Finance.
Investigators are looking into how, on 21 August 2021, the company tried to settle an invoice from Muscat for €5,900. That transaction was, however, rejected by JWP Malta’s bank. Another transfer of the same amount, in October 2021, to a Belgian bank account held by Muscat was also rejected.
Accutor’s Bhatti ‘got in touch after my resignation’
When contacted, Muscat denied that the raid of his home by the police back in January 2022 had anything to do with his Accutor contract or suspicions that it was bogus and merely a vehicle to receive kickbacks from the hospitals’ deal.
“Strongly refuting” the allegations about the contract, Muscat insisted he has “carried out legitimate and documented work in connection with my contract”.
Muscat insisted when asked that he “was not aware” that Shaukat Ali, described as the ‘brains behind the hospitals’ deal’, and his son Asad were also consultants for Accutor.
He said he had been introduced to Bhatti “years back” by his former chief of staff, Keith Schembri, and that Bhatti got in touch with him “after I announced my resignation”.
Transactions of Accutor AG, the Swiss payroll company that played a key role in funnelling funds from VGH-Steward and Bluestone, show that the companies sent at least €7 million to Accutor, which then directed payments toward VGH directors and behind-the-scenes investors.
The suspicion is that a layering process was employed through the companies to hide the funds’ origins.
Consultancy contract was ‘legitimate’, Muscat insists
“Strongly refuting” the allegations about the contract, Muscat insisted when contacted by journalists that he has “carried out legitimate and documented work in connection with my contract”.
But when asked to provide any such documented evidence, Muscat refused, saying, “It is evidence that shows the projects I have been working on and meetings held.
“I do not believe I should divulge them beyond making them available to the competent authorities.”
Nor would Muscat confirm that his contract had been terminated after four payments, but he insisted that “everything was carried out accordingly”.
Asked if he had any regrets about how the hospitals’ deal panned out, Muscat said, “Obviously, with the benefit of hindsight, things could have been done better by all concerned.”
He somewhat cryptically added, “I regret that we missed out on an enormous possibility, mostly because the vested interests would never let it happen.”
Muscat also insisted that he asked nothing of his successor, current Prime Minister Robert Abela, vis-à-vis the hospitals’ concession before leaving office, saying, “I simply introduced him to the main stakeholders.”
Muscat involved ‘at the end’ of failed Crystal Palace FC bid
Muscat’s intentions for Maltese football have been clear since he left office, having since been elected chairman of the Malta Professional Football Clubs Association. Still, he also had his sights on the English Premier League, where he advised Bhatti on a failed bid to purchase Crystal Palace FC, the league’s oldest club.
Several red flags were raised on Bhatti’s offer over what were suspected to be fake financials.
Acquisition documents supplied to the investigation showed the role of a UK law firm and a bank that made a credit facility for the deal possible.
The acquisition involved an unusual financial structure with substantially higher fees than usual.
Bhatti denied any knowledge of bogus financial accounting but confirmed that Muscat was his partner on the deal.
Bhatti also denied that any documents produced for the deal had been fraudulent and insisted that ‘his enemies’ had tried to smear him in a number of ways and that he was a victim of fraud.
Muscat, however, says he was only “involved towards the end of the deal with Crystal Palace as it fell through”.
“I was asked to monitor the situation, on Bhatti’s behalf, about his interest in a group involved in takeovers within the football industry.”
He insists he knew nothing of the issues raised, and the fact that he consulted on the Crystal Palace FC deal was proof that he actually did some work for Bhatti.
Additional research contributed by the Daphne Caruana Galizia Foundation.