A frontman for the Vitals hospitals deal has claimed he took no salary during his two years as director and only received “accrued” payment when the government concession was taken over by Steward Health Care.
Ram Tumuluri told Times of Malta that Steward agreed to pay his “accrued salary” as part of a buyout deal in which the hospitals’ operation was sold to the American company in 2018.
Damning reports on the Vitals deal by the auditor general have since prompted questions over whether those behind it were only there to turn a quick profit by selling the concession, rather than having any desire to improve Malta’s healthcare system.
Vitals was awarded the running of the St Luke’s, Karin Grech and Gozo hospitals in late 2015, in what the auditor general later described as “collusion” with the government in the pre-tender phase.
Documentation seen by Times of Malta indicates that, during his first two years at the helm of Vitals, Tumuluri did not pay any income tax in Malta.
Questioned about his tax affairs, Tumuluri said in an e-mailed response through his local lawyer that he did not draw any salary during his time with Vitals in Malta.
Tumuluri said Steward agreed to pay what he described as his “accrued salary” as part of the sale of shares. He said Steward took explicit responsibility for making any tax payments that arose out of those payments.
A spokesperson for Steward declined to comment about Tumuluri’s tax payments.
The auditor general was scathing about the Vitals deal, saying the belief it could live up to its contractual obligations under the “dubious concession” resulted from government officials’ “naivety” and “gross negligence”.
An investigation by Times of Malta last year found that when Steward took over the concession, it pumped millions into a Swiss company, Accutor AG, which then paid ‘consultancy fees’ to former prime minister Joseph Muscat.
Steward has since said Accutor was “nominated” by the Vitals shareholders as the place to send the payments for the buyout.
Secret Accutor documents show Tumuluri and other figures associated with Vitals went on to receive large payments from the Swiss company.
Muscat’s Burmarrad home and Pietà office were searched by the police in January over €60,000 worth of payments he received from Accutor and an associated company soon after he resigned as prime minister in 2020.
Investigators suspect the payments could be linked to corruption in the hospitals deal.
Muscat denies any wrongdoing, stating the payments were for legitimate consultancy work he carried out for Accutor owner Wasay Bhatti.
Former Accutor partners Tyrone Greenshields and Kamal Sharma have raised red flags about Bhatti’s activities. They stepped down from Accutor in 2019 over suspicions their company had been used to make and receive large payments that were deliberately shielded from their view.
A magisterial inquiry into the Vitals deal was triggered in 2019 after rule-of-law NGO Repubblika filed a complaint accusing former ministers Konrad Mizzi, Edward Scicluna and Chris Cardona of complicity in an act of “modern-day piracy”.
Auditor general’s say about deal
Two reports by the auditor general have delivered a damning verdict about the management of the hospitals deal and the process leading up to it.
In uncharacteristically strong language, Auditor General Charles Deguara said the belief that Vitals could live up to its contractual obligations under the “dubious concession” was a result of “naivety” by certain government officials, and “gross negligence” in the case of others.
He noted how consistent changes to the original contract signed off by Mizzi solely favoured the interests of Vitals, with the government rendered “impotent” in holding the concessionaire to account.