The trial against those accused of bribery, fraud and money laundering concerning the hospitals’ deal will proceed, according to a court decree on Tuesday by Magistrate Rachel Montebello who declared there was sufficient evidence against those previously at the helm of government.

The decree was based on the magisterial inquiry, following a four-year investigation, which details the involvement of the main players in a “fraudulent deal” that was not in the public interest. The court annulled the agreement last year on the basis of fraud.

Among those accused is disgraced former OPM chief of staff Keith Schembri. Despite claiming to have cut ties with his personal businesses when he was made chief of staff at the Office of the Prime Minister, Keith Schembri went the extra mile to make money from the hospital concession in every conceivable way, investigators found.

He pulled the strings and kept everything under his control, profiting from services to the concession and creating business ventures for himself (although his ownership remained concealed).

From cancer treatment facilities to catering, from renting out properties to spending tens of thousands of public funds on reputation management, investigators concluded that Schembri took the public for a ride with the help of enablers.

‘A concealed owner’

The magisterial inquiry concluded: “Schembri was central to all decision-making on the Share Purchase Agreement (SPA) with Steward and the aftermath of the transfer. He even had input as to which VGH creditors should be paid. His involvement seems to us more in keeping with a concealed owner than an officer of the Government of Malta.”

The magisterial inquiry notes that Schembri had “a long history of using offshore companies and bank accounts”. Brian Tonna and Karl Cini of the now-defunct Nexia BT assisted him in setting up the companies.

Schembri continued to use these offshore assets during his time as chief of staff of disgraced former prime minister Joseph Muscat.

The inquiry describes Schembri’s role as a puppet master, with former minister Konrad Mizzi as a sidekick riding the bandwagon. Even Muscat may not have been fully aware of Schembri’s dealings at the time, investigators noted.

Yet Shaukat Ali told Kamal Sharma (a former director of Accutor AG that was sending payments to Joseph Muscat) that Mizzi, Schembri and Muscat were in the concession deal with both VGH and Steward and that €18 million a year was going to that group from the concession, the inquiry report states.

A finger in every pie

Through several companies that he set up and controlled, although never quite officially showing his stake, Schembri profited from services the hospitals required.

Investigators concluded that he also used taxpayer money to set up new business ventures in the medical sector, like Cannapharm, focused on medical cannabis that was fronted by a Russian.

The inquiry reveals a network of enablers working with Schembri to profit from the hospitals concession. Their names keep appearing in the magisterial inquiry, such as Ivan Vassallo and Adrian Hillman (during his time as Managing Director of Allied Newspapers, which publishes The Times of Malta).

One such company was Eurybates, which, on paper, was owned by Ivan Vassallo of Technoline (which he also did not really own, according to investigators). Investigators concluded it was a vehicle for kickbacks.

In the six years between 2016 and 2021, Eurybates derived around €1.9 million in what were most likely kickbacks from four businesses that were major suppliers to the concession, investigators concluded.

“This income was under the guise of providing consultancy and administration services and was earned seemingly without the necessary personnel to deliver what could only be described as highly technical services, which in some cases were supported by backdated contracts drawn up by Mr Vassallo.”

Apart from the income derived from these companies, Keith Schembri’s companies Kasco Foods Ltd and Kasco Engineering Ltd, gained lucrative contracts to supply goods and services to the catering companies supplying the concession and other hospitals through Malta HealthCare Caterers Ltd. The contracts were valued at €1.5 million a year.

Investigators concluded that while Schembri profited from all this, he controlled the strings, even deciding on hospital board members that would support decisions being taken.

The inquiry mentions Impaqt Ltd, for example, that was charging Eurybates (another of Schembri’s hidden companies) €6,000 to €9,000 per month between March 2019 and July 2020.

The inquiry states: “This is significant because Schembri’s Kasco Engineering provided finance of around €80,000 to fund Impaqt, and the data reveals that Kasco was initially in control of the company.”

It provided engineering consultancy services to the health and energy ministry (then under the control of Konrad Mizzi). Impact added a 44% markup on invoices to the ministry, according to investigators.

These contracts generated over €500,000 in sales in its first 20 months, which was billed to the hospitals prior to the concession being awarded.

Investigators noted that as journalists were revealing fact after fact, Schembri spent tens of thousands of taxpayer funds to “manipulate online records of what the press was revealing about him and Konrad Mizzi”.