Original hospitals deal concessionaire, former Vitals Global Healthcare director Ram Tumuluri, has claimed in an official disclosure to the US authorities that he was threatened repeatedly by former Office of the Prime Minister chief of staff Keith Schembri and others that he would meet the same end as journalist Daphne Caruana Galizia if he didn’t sign the hospitals’ concession over to Steward Healthcare.

In a whistleblower complaint to the US Securities and Exchange Commission (SEC) alleging violations of the Foreign Corrupt Practices Act, obtained by the Organised Crime and Corruption Reporting Project (OCCRP) and shared with partners in Malta, The Shift and The Times of Malta, Tumuluri claims the threats were made by former Office of the Prime Minister Chief of Staff Keith Schembri, then-health minister Konrad Mizzi and one of the concession’s original brokers, Shaukat Ali, among others.

Tumuluri also says that former prime minister Joseph Muscat played a role in what Tumuluri claims was a forced handover of the concession to Steward for €1. Muscat denies being a part of such coercive tactics, which is contradicted by Tumuluri’s filing and affidavit. Schembri has also vociferously denied Tumuluri’s claims.

Tumuluri has also accused Steward Health Care of engaging in unlawful activity with the government of Malta and insists he only signed the concession over because he was made to fear for his life by government officials and others working on their behalf.

The 505-page complaint includes an affidavit from Tumuluri and hundreds of pages of supporting documents, such as internal emails, contracts and project plans.

He said they lasted through the period of her assassination that October until Tumuluri says he eventually caved into demands in December 2017 and signed the concession over because he feared his life and that of his family would be in danger if he didn’t.

Schembri, according to Tumuluri’s disclosure, warned him that “[he] is the law in Malta” and that no agreement could protect Tumuluri’s interest.

He allegedly warned that “if the government could silence a vocal reporter like Ms Caruana Galizia, Mr Tumuluri should be very careful not to make enemies with the government”.

A ‘true and accurate’ photograph of an unopened envelope sent to Bluestone with a €1 coin enclosed for the concession presented as part of the filings to the US SEC.

‘You want us to be a friend, not a foe’

Tumuluri alleges in his SEC whistleblower disclosure that at one meeting at Castille, Schembri told him, “You know what happened with Daphne [Caruana Galizia] and you don’t want to end up in that position. You want us to be a friend, not a foe.”

Tumuluri discloses several meetings in which he alleges his life had been threatened and claims he was pulled aside afterwards from one such meeting,  by Mizzi, who warned him, “Don’t force these guys to go to that level.”

At another such meeting, Tumuluri says Shaukat Ali and his son Ali, who he says were “acting as de facto agents and representatives of the government of Malta”, told Tumuluri that although he had signed up to do business with a European Member State, Malta was, in fact, a “mafia state” where “the cost of life is less than €10,000.”

Chillingly, during these meetings in the presence of both Schembri and Mizzi, Shaukat Ali told Tumuluri, according to his account, that if the government could “get rid of someone like Daphne” Tumuluri was of no significance and that it could also “get rid of” him quite easily.

Tumuluri claims that it was only under duress and “as a result of the repeated threats of violence and other harm, including the threats of murder conveyed to him in December 2017” that he ultimately gave in to the government’s demands that he sell Bluestone’s shares in Vitals Malta to Steward.

Keith Schembri, ex-Chief of Staff for disgraced former prime minister Joseph Muscat

‘We need to silence Daphne’ – Schembri

In his official SEC filing, seen by The Shift and investigative partners, Tumuluri says he feared that if he did not comply with the government’s demands, he would be murdered by “agents of the government of Malta”.

He claims that over the course of the preceding year he “had various frightening and otherwise uncomfortable experiences with the government of Malta”.

He details how on one such occasion in early 2017, he was present at the Office of the Prime Minister with Mizzi and Schembri.

Tumuluri says that Schembri turned to him and stated, “in sum and substance that ‘we need to silence Daphne [Caruana Galizia]’, and asked whether “we know anyone who could get rid of her.”

Tumuluri says he thought Schembri had been joking at the time and disregarded the comment.

He says he began changing his mind after he said he witnessed the detonation of a car bomb on the other side of the road while he was driving in Malta in February 2017.

Tumuluri was presumably referring to the car bomb in Msida that left Romeo Bone severely injured on 20 February 2017.

Tumuluri says he later heard Schembri “chastise the individual or individuals responsible for the car bomb that Mr Tumuluri had witnessed on the grounds that the operation had not been conducted properly”.

Cardona ‘cancelled Sicilian hit on Caruana Galizia’

Soon after that, in March or April 2017, Tumuluri claims he attended a meeting at the Office of the Prime Minister with Schembri, Mizzi, and Asad Ali, the latter being the son of one of the hospitals’ original dealmakers Shaukat Ali.

Tumuluri reports in his FCPA filing that Schembri told him at that meeting that former minister Chris Cardona, one of Caruana Galizia’s frequent targets, “had paid the Sicilian mafia €10,000 to assassinate Ms Caruana Galizia” but that Cardona the next day developed a case of “cold feet and had cancelled the directive”.

Schembri, Tumuluri says in his sworn statement, said that Cardona had never gotten the money back after cancelling the directive.”

Tumuluri claims he had the impression that Schembri made the statements “as an amusing anecdote and to mock Cardona for being weak,” but despite this, he still “felt deeply uncomfortable, concerned, and intimidated”.

An investor’s hand

In another disturbing incident Tumuluri reported to the SEC, he says was present for a meeting at the OPM in December 2017 where several individuals, including Schembri and Armin Ernst, had discussed a court injunction filed by Ashok Rattehalli, then a consultant and medical director for Vitals.

Rattehalli had been employed with Vitals since June 2016 and had received an option to purchase 5% of Vitals Malta shares as part of his compensation.

But since Tumuluri could not permit Rattehalli to exercise the option because a deal to hand the concession over to Steward had not yet been brokered, Rattehalli had sought and obtained an injunction to prevent the transfer of Vitals to Steward, as The Shift had revealed.

Shaukat Ali (center) and his sons Asad (right) and Wajid (left)

According to Tumuluri’s filing, “During this meeting, Schembri received a telephone call from Asad Ali reporting that Asad Ali had threatened Rattehalli by advising him that he would cut off Rattehalli’s hand and use his hand to apply a signature to a document to withdraw the injunction if he did not withdraw the injunction himself.”

Rattehalli, Tumuluri said, “immediately withdrew the injunction as directed”.

Muscat’s involvement

Although Muscat insists he played no role in the deal, Tumuluri insists that “Schembri’s demands that Mr Tumuluri sign the share-purchase agreement [with Steward] were made at the direction of Muscat”.

During the meeting, Tumuluri claims that “Muscat entered the room and demanded that the share-purchase agreement be signed that same day”.

Tumuluri claims that Muscat told him, “Do I need to butt your heads together to get this signed?”

Before leaving the room, Tumuluri says, Muscat advised Schembri that he expected the share-purchase agreement to be signed within half an hour.

Schembri then, according to Tumuluri’s account, asked him to step outside the room with him because he did not want to say certain things in the presence of lawyers.

Steward’s Armin Ernst meeting with then-prime minister Joseph Muscat.

“Schembri began discussing political relationships among ministers and advised that the government had to oust Mr Tumuluri from the concession and had to replace him with Ernst and Steward.”

Tumuluri says Schembri further advised that Muscat had asked Schembri to speak to him personally “to ensure that the share purchase agreement was signed the same day”.

Tumuluri further claims that Muscat had instructed Schembri to remove Tumuluri and Bluestone and to transfer the concession to a then-undisclosed third party, which later turned out to be Steward, with which the government had already struck a deal.

That meeting was in December 2017, and Schembri, Tumuluri says, told him the government wanted to announce the concession’s transfer to Steward by Christmas.

He says at that point, Schembri warned that if he “wanted to do business in Europe or elsewhere again, he should stay on his ‘nice’ side, as opposed to his ‘nasty’ side, he should remain a ‘friend’” and not a ‘foe’, and he should sign the share-purchase agreement immediately.”

Brown bags and a board position

Nor was Steward chairman and CEO Ralph de la Torre, who has not replied to the investigation’s questions, spared in Tumuluri’s US SEC filing, with Tumuluri claiming de la Torre told him that he had no problem with bribing government officials if need be.

“In touting Steward’s supposed competitive advantage in Malta, de la Torre told Mr Tumuluri that Steward was not as rigid as Partners Healthcare International [Tumuluri’s former partner for the deal],” according to the filing.

Along such lines, Tumuluri adds that “de la Torre boasted that he could issue ‘brown bags’ to government officials if necessary to close transactions, insinuating that he would bribe officials of the government of Malta.”

Tumuluri says he did not respond to the “brown bag” comment and did not agree to assist Steward with any violations in Malta of the Foreign Corrupt Practices Act. He said he did, however, agree to further discussions with de la Torre, subject to a non-disclosure agreement, to explore the possibility of Steward serving as an equity investor in Vitals Global.

Tumuluri claims that through the latter part of 2016 and the entirety of 2017, Ernst conspired with Steward CEO Ralph de la Torre, along with government officials and others, to steal his confidential and proprietary information, such as business models, intellectual property, and other trade secrets; defame him; undermine his business relationships; disrupt financing to Vitals Malta; and to strip him of his interests in Vitals Malta and the hospital-services concession.

Steward Health Care Chairman and CEO Ralph de la Torre speaking in Gozo in 2018 as Armin Ernst (first from right) looks on.

He also claims the collusion was aimed at blocking him and Vitals from extending his Malta business model to other countries in Europe and thwarting the implementation of his business model through an information-technology platform in the United States and abroad.

Tumuluri says he also had information from Shaukat Ali that, during the discussions between the government and Steward around September and December 2017, de la Torre also had travelled to Malta and had met with Prime Minister Muscat on multiple occasions.

He also says that, according to Schembri, Ernst had been in discussions with the new Health Minister, Chris Fearne, about taking the concession from Vitals Malta.

He claims Shaukat Ali told him that de la Torre offered Muscat a seat on the Steward Board once he left his government position. Tumuluri provided no follow-up to the discussion he says Ali had cited.

‘Completely false and baseless’

When it comes to the threats Tumuluri says he was made, Keith Schembri perhaps features most prominently. When asked to react to the accusations being made in his respect, Schembri labelled the accusations as “completely false and baseless”.

Schembri, in a stark contradiction to Tumuluri’s claims, insists it was Steward Healthcare that approached “us” at the United Nations General Assembly in New York to express their interest in acquiring Vitals in Malta.

“It is unfortunate that Mr Tumuluri has chosen to make such outrageous claims, and I question his motives behind doing so.

“It appears that he has a vivid imagination and is attempting to associate this case with the tragic murder of Mrs Caruana Galizia, which is absolutely horrendous.”

“I vehemently protest against these baseless allegations and false claims made by Mr Tumuluri.”

On his part, Muscat says it is a “clear and uncontested” fact that he was “made aware of Steward’s interest in the concession after Steward and VGH reached an agreement in principle on the concession”.

He adds, in a complete contradiction of Tumuluri’s filing, “I categorically deny being at any stage involved in the negotiations between the two sides, either directly or indirectly, and I never asked for any position.”

“I also emphatically deny ever organising and/or attending any meeting whatsoever involving Steward and VGH. I challenge anyone to produce any sort of evidence to the contrary.”

“As stated numerous times, my only interest was in a seamless transition between the two entities as an agreement was reached.”

Like Schembri and Muscat, Shaukat Ali also denied the accusations Tumuluri is levelling, saying, “I can confirm that the allegations of wrongdoing, as stated in your communications, against me and my son are entirely false and vehemently denied.”

He also warned he was “liaising with our lawyers both in Malta and abroad who are monitoring the situation, including the publication of defamatory material. Should the need arise, we will not hesitate to take legal action.”

As for Konrad Mizzi, the former health minister insisted Tumuluri had not been coerced into handing over the hospitals’ concession.

“I reject any claim that Mr Tumuluri was being bullied into exiting, and deny even being aware that he received any threat if he did. If a statement was made stating that I was present, then it is false.”

Konrad Mizzi

“At the time of the transfer of shares, government had approved the transfer onto Steward after the Office of the Prime Minister was approached with a proposal for the acquisition of the concession. My understanding is that as private parties, the transferor and transferee were free to accept or decline to reach an agreement, and an agreement was in fact reached.”

When contacted about the filing, Steward Health Care International said it “emphatically rejects any and all allegations of impropriety made by Tumuluri, who is widely reported and recognised as an international fraudster, against the company and its directors.”

“We consider these accusations malicious, self-serving and entirely without merit. We reserve our rights to take legal action to defend our position and reputation.”

Click on the following links for the full replies supplied by Keith Schembri, Shaukat Ali, Konrad Mizzi and Joseph Muscat.

Additional research contributed by the Daphne Caruana Galizia Foundation.