• Activists demand criminal probe to establish if there was criminal complicity by three ministers in controversial contract to shell company for the running of three public hospitals worth over €1 billion

• Secret agreements signed by VGH investors prior to public calls for the running of the three hospitals 

• ‘Act of modern day piracy’ carried out in ‘complicity’ with Finance Minister Edward Scicluna, Tourism Minister Konrad Mizzi and Economy Minister Chris Cardona, activists tell court

Three senior government ministers have been accused by activists of being complicit in a criminal conspiracy to drain the public coffers as part of the controversial Vitals Global Healthcare (VGH) deal worth over €1 billion. 

In a 150-page application demanding an inquiry into the VGH deal, activists from the Civil society NGO Repubblika singled out Finance Minister Edward Scicluna, Tourism Minister Konrad Mizzi and Economy Minister Chris Cardona as key facilitators in the “coordinated” act of modern day “piracy”.

They question in the application signed by PN MP Jason Azzopardi why the three ministers, who played differing roles in the deal, were so willing to give a “disproportionate” financial advantage to a company with no medical experience.

Ministers 'went through the motions' of public competition

The activists accuse Dr Cardona and Dr Mizzi of going through the motions of a public process based on impartiality and value for money to award the contract, while in reality being part of a criminal conspiracy with the winning bidder.

As previously reported by The Sunday Times of Malta, the application details how Dr Cardona signed a memorandum of understanding in October 2014 with the investors behind VGH.

This MoU was signed five months before the request for proposals for the running of three public hospitals was even published by Projects Malta, which falls under Dr Mizzi’s control.

Projects Malta has refused to publish who sat on the selection committee that awarded the contract to VGH.

The ministers are facing accusations that their primary interest was lining their own pockets, rather than safeguarding taxpayers’ money and patients’ needs.

The Shift News had revealed how another MoU between the investors was signed in November 2014. This MoU contained specific details about the request for proposals eventually published by Projects Malta, the application states.

Finance Minister continued to dish out millions

Repubblika accused the Finance Minister of continuing to dish out millions to VGH whilst being fully aware of the misgivings about the investors behind VGH.

The application charts how slain journalist Daphne Caruana Galizia had correctly predicted that VGH would win the contract and had also published a due diligence report raising serious questions about the “sham company”.

According to a transcript of the due diligence report annexed to the Repubblika application, the unnamed author of the report flagged the way how the Prime Minister’s chief of staff Keith Schembri told those interested in the contract that if they worked with Ram Tumuluri, the project’s frontman, the project would be awarded to them.

The application says Prof. Scicluna was aware that VGH only had a share capital of €1,200, yet was supposed to invest some €200 million to upgrade the three hospitals.

The 1,600 employees at the three hospitals were placed on the public payroll, and the Finance Minister even signed off on an €18 million increase in the €50 million already being given annually to VGH.

Numerous side letters were signed by Prof. Scicluna granting VGH additional millions, at a time when the Finance Minister was fully aware of the company’s suspicious set up, Repubblika says in the application.

The Finance Minister was also the one who gave the go-ahead to allow VGH to unilaterally extend the 30-year extension to a 99-year period.

Repubblika questioned how Prof. Scicluna did not find it strange that VGH’s CEO popped up as the new CEO of Steward Healthcare, soon after the shell company sold off the concession to the American firm.

Suspicions of 'coordinated criminal activity'

The applications reveal how Ganado Advocates had to write to the registry of companies after discovering that VGH had listed the law firm’s Valletta offices as the company’s registered address, without their permission.

“Konrad Mizzi and Edward Scicluna had no qualms negotiating with people who stole and even lied about their address”, the application says.

This all showed the lack of due diligence carried out by the Maltese authorities, with the blessing of the three ministers, the activists argue.

This gave rise to suspicions of coordinated criminal activity by the three ministers, and there was reasonable suspicion they were complicit with third parties to steal or defraud million from the Maltese public.

The modern day act of piracy, which saw the investors behind VGH flee the country, leaving behind a trail of debt amounting to €50 million, could not have been possible without the “active and essential” contribution of these three ministers, the activists accuse.

News reports about the manoeuvres by those behind VGH would have been enough to spark an investigation, Repubblika said, yet the police sat back and did nothing.

The activists are also accusing Ivan Vassallo, the owner of medical supply firm Technoline, of being part of the criminal conspiracy.

Technoline was given the exclusive right by VGH to handle procurement for the three hospitals, meaning other medical firms had to submit their bids for contracts to a rival.

The Shift News had revealed how VGH funded the €5 million takeover of Technoline, which saw Mr Vassallo suddenly buy out its long time owners.

Opposition leader Adrian Delia has taken to the courts to try get the deal rescinded.

Timeline of some key events

October 2014 – Economy Minister Chris Cardona secretly signs a memorandum of understanding (MoU) with the businessmen behind VGH.

November 2014- The businessmen sign another MoU between them based on specific details contained in the request for proposals.

March 2015 – Projects Malta, which falls under Tourism Minister Konrad Mizzi’s control, publishes a request for proposals for the hospital project.

September 2015 – Then Health Minister Konrad Mizzi agreed to pay VGH €70 million a year, cover the pay of all employees at the hospitals and agreed to pay €1.2 million for the Barts medical facility in Gozo and €1 million for the air ambulance service.

October 2016- Heavily redacted versions of the contracts signed with VGH are released. All key figures and dates are removed.

December 2017 – ‘This is the real deal’- Health Minister Chris Fearne heralds the entry of Steward Healthcare and the exit of VGH.

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