Former Opposition Leader Adrian Delia has replied in court to the appeal filed by Steward Healthcare in the hospitals concession case, saying that when it stepped into the concession Steward did so “with eyes open and widened pockets.” Its failure to carry out due diligence did not exonerate them from responsibility.

A court in February annulled the hospitals concession deal between Vitals Global Healthcare (later succeeded by Steward) and the government after finding fraud.

Delia said Steward Malta Ltd had itself clearly admitted in its appeal that the emphyteutical concession for the three State hospitals was fraudulent, claiming that it had failed to carry out due diligence in terms of law because it was under pressure by the government to take over the concession as soon as possible.

But Steward could not now argue that they had nothing to do with any shortcomings by their predecessors, Vitals Global Healthcare.

He noted that in a letter to Prime Minister Robert Abela, dated September 27, 2021, Steward president (and previously Vitals CEO) Armin Ernst wrote that, ”Recent evidence suggests that the granting of the concession to VGH to say the least is improper. It is not the purpose of this letter to consider and conclude if the award was fraudulent, though there are clear indications that this is the case.”

Further on, that letter said that: “Although you would appreciate the contents of the inquiry is confidential, we are well aware from media reports that this particular inquiry refers to the alleged misconduct of three ex-ministers in connection with the award of the concession…”

Steward stepped into the concession “with eyes open and widened pockets,” said Delia through his lawyers, rebutting Steward’s arguments filed before the Court of Appeal.

He pointed out that seven years down the line, Steward had failed to carry out works listed in the deal, including the setting up of a medical tourism hub at St Luke’s Hospital, a new hospital in Gozo and restructuring of Karin Grech Hospital.

Those were major obligations which the concessionaire had not fulfilled in spite of having already been handed the funds for them, and therefore those funds had been misappropriated to the detriment of the Maltese State.

Objection to new documents

Delia noted that Steward Malta were seeking court authorisation to produce new documents at the appeal stage.

But why didn’t they do so before, when they had ample time to do before the first court?

Although this was such an important case on a national scale, Steward had hardly produced any evidence and in fact, their lawyer had minuted that they would wrap up evidence “in one sitting.” They did not produce one single viva voce testimony.

Moreover, Delia said, he had himself been seeking some of the documents which Steward now wanted to present. Among them was an MOU for €8 million plus an attempt to bind the government to increase payment for recurring expenses by 9% annually as from 2018 onwards.

Rather than ask to present those documents at appeal stage, Steward ought to have handed them over to the magisterial inquiry investigating any criminal wrongdoing in relation to the hospital privatisation deal.

This was simply a delaying tactic, argued Delia's lawyers.

Earlier on Tuesday the government said in a separate application that it was also objecting to Steward's request to present new evidence and documents. 

Replying to a request for Steward Health Care International, a Spanish-registered company, to intervene at appeal stage, Delia countered that this company lacked juridical interest in the suit.

It was never a party to the proceedings before the first court and was neither an owner nor shareholder of the Malta-based Steward companies which the court declared to have acted fraudulently in respect of Maltese society.

Nor was it a party to the original concession and any related agreements.

If, as it claimed, its rights were prejudiced, Steward International should have sued the other parties separately.

Moreover, any claims as to alleged breach of its fundamental property rights should have been brought before a constitutional court rather than try to avail itself of this appeal. The foreign company ought to have intervened in the proceedings at the start.

Delaying tactic

Delia said a request by Steward for the case to be referred to the European Union Court of Justice was also just a delaying tactic.

There was no legal interpretation issue and the questions Steward sought to put to the EUCJ did not detail any specific provision for which interpretation was sought.

Moreover, that court lacked the competence to pronounce itself on the matter because this was purely a local issue, a temporary emphyteutical concession granted to Maltese companies by the Maltese government in Malta.

Consequently, all requests by the appellants were to be rejected, argued Delia.

Lawyers Edward and Nicholas DeBono signed the replies.