Pakistani family accused of taking millions from Malta taxpayers

Aqra bil-Malti

When the concession for the management of three of Malta’s public hospitals was awarded, the bank accounts in Dubai controlled by the family of Pakistani Shaukat Ali Abdul Ghafoor immediately received $5 million. Members of the family appeared in court today.

Investigators found that the money, received as a “success fee”, was only the tip of the iceberg. The hospitals inquiry found evidence the family took some €15 million, and possibly more, since the funds from Maltese taxpayers diverted to their accounts in secretive jurisdictions were difficult to trace.

“That award also opened the floodgates to multiple other diversions of concession funds to the Ali family, most of which also flowed to secrecy jurisdictions where the ultimate beneficiaries are yet to be uncovered,” the inquiry states.

The money transfers traced by investigators in the hospitals inquiry confirm press reports in the past year that taxpayer money also flowed into the bank accounts of Shaukat Ali’s two wives Aasia Parveen and Fakhra Ali, his sons Asad and Wajid, and his “honorary daughter” Saba Binte Abbas.

“We consider, to all intents and purposes, they acted as a unit,” investigators conclude.

In 2019, The Shift was already reporting about Shaukat Ali’s involvement in shaping the deal.

Seen as ‘the brains behind the deal’, the inquiry concluded that Shaukat Ali worked with then-OPM chief of staff Keith Schembri, using “puppets” to act as fronts in various companies and roles set up to reap personal profits from what should have been a deal to manage three of Malta’s public hospitals.

“Where you find Shaukat Ali, you also find Keith Schembri,” the report states.

Even as they siphoned funds, the hospitals were left abandoned. The inquiry concludes that the deal meant nothing more to those involved than a quick sale and a high return.

“Shaukat himself has a lengthy track record of corrupt involvement with top government officials and, immediately prior to moving to Malta, his family were involved at the highest levels of Colonel Gaddafi’s notoriously corrupt regime in Libya, working with the healthcare systems there,” the inquiry confirms.

It adds that “Shaukat Ali was treated as and referred to by VGH / Steward Healthcare CEO Armin Ernst as ‘the major shareholder’ even though he never appeared as the Ultimate Beneficial Owner on paper”.

Press investigations have shown that money transferred by the Maltese government to the concession partners was swiftly transferred to the hidden partners.

On top of the estimated €15 million in personal transfers for fake consultancies found by investigators, taxpayer money was also used to buy companies providing medical services to the hospitals, increasing their personal profits.

The inquiry reveals how they used complex offshore structures to hide the owners of companies fronted by “puppets” who included Ivan Vassallo, Ram Tumuluri, Mark Pawley, and Adrian Hillman. Hillman was far more deeply embedded in Keith Schembri’s “nefarious deals” than previously thought.

The inquiry’s findings also confirm press investigations showing that Schembri, as well as former minister Konrad Mizzi and disgraced former prime minister Joseph Muscat, also profited from the deal.

Shaukat Ali told Kamal Sharma (a former director of Accutor AG, the entity 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.

Ram Tumuluri is one of “the puppets” mentioned in the inquiry. “The data repeatedly shows that if Ram Tumuluri is involved in a project, Shaukat is kept informed. And if Shaukat is informed, so usually is Schembri,” investigators conclude.

In a collaborative investigation between OCCRP, The Shift and The Times of Malta, Tumuluri had stated that he was forced as the Head of VGH to transfer the deal to Steward Healthcare for a pittance.

Millions of euro were paid to Tumuluri and Mark Pawley, although investigators think it is probable they must have been obliged to pass on a substantial proportion of these sums to others.

“None of this could have been achieved without the connivance of well-placed senior officials, particularly high-ranking ministers and the Office of the Prime Minister,” the inquiry states.

The inquiry notes that disgraced former European Commissioner John Dalli had been linked to political corruption over decades, and that he was active in Libya during the final decade of the Gaddafi regime — at the same time Shaukat Ali was resident in Libya and working hand in hand with the regime.

“There are business links between the Ali and Dalli families going back to 2009 when Asad Ali, the son of Shaukat, was a shareholder in a company controlled by John Dalli’s daughters, Louisa Dalli and Claire Gauci Borda. We suspect that Shaukat Ali was introduced to Malta and Maltese politicians through John Dalli.”

On Monday, the court found enough evidence to proceed against Shaukat’s son Asad. Today, the court found there was enough evidence to charge Shaukat Ali with corruption, money laundering, and other crimes in connection with the hospitals deal.

The court imposed an asset freeze of Shaukat Ali and Aasia Parveen’s assets and forbade the two from discussing the case or its details in public.

This article was brought to you with the support of OCCRP and the Daphne Caruana Galizia Foundation.