Medical supplies company facing corruption allegations given €1.3 million in new contracts

The government is ignoring a magisterial inquiry that has led to criminal charges being filed against the owners of a medical supplies company acquired through public funds as the health ministry continues to pump millions into Technoline.

A list of tenders and direct orders published in the Government Gazette shows that during the first half of this year, the health ministry awarded Technoline 94 new contracts, most through direct orders to supply the government with medical devices worth over €1.3 million.

The magisterial inquiry into the hospitals scandal confirmed press reports that the company’s owner on paper, Ivan Vassallo, at the time an employee of Technoline, acted as a front for the acquisition of the company through public funds given to Vitals Global Healthcare, which was awarded the concession to manage three of Malta’s public hospitals.

The inquiry states that investigators discovered Vassallo was a freemason, together with other proxies in the deal, including the former head of Allied Newspapers, publishers of The Times of Malta, Adrian Hillman, and contractor Pierre Sladden.

The inquiry concluded that they acted on behalf of former OPM chief of staff Keith Schembri and former minister Konrad Mizzi to acquire the company.

Contrary to what happened in the wake of the case involving oil suppliers Total and Trafigura during the 2013 ‘Dirty Oil’ scandal, in this case, the government chose to persist in its financial support of Technoline, pumping millions into the company through direct orders and tenders.

The latest was a €130,000 direct order signed on 26 June for a twelve-month contract related to the laboratories at the Gozo General Hospital.

This was awarded more than a month after the charges against Technoline were presented in court, and a €5 million freezing order was issued.

It is the latest in a series of contracts awarded to Technoline.

During the past years, Technoline has become the government’s primary supplier of medical devices after the concessionaire chosen by the government – Vitals Global Healthcare – spent €5 million of the public funds received to buy the company and then give it exclusivity for supplies to the hospitals, increasing its profits. The Shift revealed this in January 2019, and it was confirmed in the magisterial inquiry’s conclusions.

According to the VGH/Steward magisterial inquiry, Technoline was bought by Vassallo’s Gateway Ltd and passed onto Vitals Global Healthcare through a series of companies used as fronts for money laundering.

While Ivan Vassallo appeared as the owner of Technoline, Pierre Sladden and Adrian Hillman were inserted as shareholders in other companies, including Gateway Solutions, to be able to buy Technoline.

The inquiry points to Hillman and Sladden as the secret business partners of Keith Schembri and Konrad Mizzi, who were heavily involved in the fraudulent deal.

Technoline, Vassallo, Hillman, Sladden, Schembri and Mizzi are pleading ‘not guilty’ to all charges against them.

Technoline was also given a multi-million-euro tender by the Foundation for Medical Services (FMS), under the direction of former health minister Chris Fearne and his chief canvasser Carmen Ciantar, to build a new ‘mini hospital’ in Paola, known as the Paola Hub. The project has not yet been completed and is two years behind schedule.