A Memorandum of Understanding (MoU) with people linked to the controversial hospital concession was signed in October 2014, a full six months before the government even published a request for proposals for running three public hospitals, The Sunday Times of Malta has learnt.
Although MoUs are not usually legally binding, the secretive signing of the agreement prior to the request for proposals being published raises questions about whether the deal was already sealed for the investors behind Vitals Global Healthcare (VGH).
The Sunday Times of Malta understands that the MoU, dated October 10, 2014, was signed by Economy Minister Chris Cardona on behalf of the government, Mark Pawley as a director of Bluestone Special Situations No 4, Ashoka Rattehalli as a director of AGMC Inc, Mohammed Shoaib Walajahi as a director of Pivot Holdings and Chaudry Shaukat Ali, as a director of Pivot Holdings.
Pakistani nationals Asad Shaukat Ali, Mohammed Shoaib Walajahi and Chaudry Shaukat Ali are all listed as shareholders of Pivot Holdings, a company which was registered one day before the MoU was signed.
Pivot Holdings is registered at the same Paola address as Bluestone Investments Malta Ltd, VGH’s locally registered parent company.
Both Pivot Holdings and Bluestone Investment Malta Ltd are shareholders in Crossrange Holdings, of which Mr Pawley and Mr Walajahi are directors.
According to Ashoka Rattehalli’s Linkedin page, he started working on a “Malta Healthcare” public-private partnership in March 2014.
In a presentation from two months before, Vitals advertised that it had signed an MoU with Malta
In a leaked presentation about the project dated February 2015, two months before the request for proposals, the people behind VGH were already advertising the fact that they had signed an MoU with the government.
The February 2015 presentation says that the next step was finalising terms between the investor group and the government, leading to the signing of a “final definitive agreement”.
Mark Pawley, who is the CEO of the Singapore-based Oxley Group, was identified by VGH as their ultimate owner.
In a comment to Malta Today earlier this month, Oxley Group disassociated themselves from the hospital project.
Oxley Group told that newspaper that Mr Pawley was the only person associated with Oxley Group who was involved in VGH’s activities in Malta.
A freedom of information (FOI) request asking for a copy of the MoU was filed by this newspaper over a year ago.
After Malta Enterprise rejected the FOI request, this newspaper filed an appeal before the Data Commissioner.
This led Malta Enterprise to file its own appeal, after the Data Commissioner asked it for a copy of the MoU so it could decide whether the decision to turn down this paper’s FOI request was justified.
The Sunday Times of Malta sent questions to the Economy Ministry, asking what the purpose of the MoU was, why no public announcement was ever made about it, and why it was signed prior to the request for proposals.
“In view of the fact that Malta Enterprise Corporation has ref-rained from comment pending the appeal before the Data Commissioner’s office, the Ministry for the Economy, Investment and Small Businesses deems that it would not be appropriate to comment at this stage,” a ministry spokeswoman said in reply.
In a hearing before the Information and Data Protection Appeals Tribunal last week, Malta Enterprise CEO Mario Galea argued that his entity was exempt from giving any information about its commercial dealings.
He said giving out any commercially sensitive information could potentially ruin a business.
In rebutting the Data Commissioner’s request for the MoU, Mr Galea said such information was not even given to the National Audit Office or other institutions.
The Opposition has asked the NAO to investigate the VGH deal.
The story at a glance
A secret MoU with investors behind the hospital concession was signed six months before the government published a request for proposals for the running of three public hospitals.
The existence of the MoU was only made known when The Sunday Times of Malta received a leaked copy of a presentation by the investors behind VGH.
In the presentation, the investor group was already telling potential financers that they would be running the Gozo, St Luke’s and Karen Grech hospitals, two months before the request for proposals had even been published.
The Economy Ministry refused to explain the purpose of the MoU, and why no public announcement was made about it.
Malta Enterprise refused a freedom of information request for the MoU. It has also appealed a request by the Data Commissioner to be given a copy of the MoU in order to decide whether its decision to withhold the document from The Sunday Times of Malta was justified.
Malta Enterprise told the Information and Data Protection Appeals Tribunal this week that commercially sensitive information like the MoU was not even handed over to institutions like the NAO.
Burning questions about Vitals’ deals
VGH named Mark Pawley as its Ultimate Beneficial Owner, “c/o Oxley Capital”, an investment firm based in Singapore. Did he provide the funding or are there other investors involved? Who really benefits from the deals?
Around the time the VGH contract was signed, Keith Schembri and Konrad Mizzi were looking to open bank accounts for their Panama companies. Is there a connection?
If the MoU was signed before the concession deal (see story on page 8), what guarantee does the taxpayer have that the call for proposals led to a genuine, not a sham, contest?
Why was no public announcement made about the MoU?
Why was the whole contract not made public?
Why did the government not reveal it would have to pay €80 million back to Vitals if it took the contract back after the stipulated 30 years?
The government has paid about €50 million to VGH over two years to cover costs, over and above the staff salaries paid from the public coffers. What did that money pay for?
How much did VGH invest into three hospitals? Did taxpayers get a good deal?
VGH is reported to have liquidity problems. Did the government’s due diligence before signing the agreement pick up any potential financial difficulties?
How much are suppliers owed by VGH?
Will penalties be applied to VGH for missing its milestones, as this newspaper reported?
Who will take political responsibility for the VGH failure after only two years of a much lauded 30-year agreement?
What is the significance of Vitals CEO Armin Ernst being employed by Steward at the same time? What is his role in their deal?
How will the sale of VGH affect employees?
Why is the government saying the deal has been signed and VGH says it has not?
Why was it reached before the government gave its consent, as it is obliged to do in the concession contract?
What business did the PM’s chief of staff and tourism minister have in being at the talks between Vitals and Steward