Time is of the essence in a National Audit probe into the controversial hospitals’ concession, Finance Minister Edward Scicluna said on Friday.
Accounts for 2016 filed by Steward Healthcare earlier this week show the previous concessionaire, Vitals Global Healthcare (VGH), had liabilities exceeding its assets by almost €9 million, leading its auditor to express his reservations on whether it had the required resources to continue operating.
As he signed off the accounts for Vitals Global Healthcare for the year ending December 2016, auditor Christopher Spiteri noted that the group made a net loss of more than €6 million and that the group’s liabilities exceeded assets by €8.94 million.
“These events and conditions indicate that a material uncertainty exists that may cast a significant doubt on the group’s ability to continue as a going concern,” the auditor said.
Vitals Global Healthcare Ltd changed its name to Steward Malta Limited on May 18, 2018, six months after the government announced it would be taking over the concession.
The 2016 accounts were signed off by directors Armin Ernst and Michael Callum on May 31, 2018 but only filed with the Malta Financial Services Authority’s registry of companies on Wednesday.
The Steward Group of Companies declared an expenditure of €45 million and revenue of €38.9 million. The group includes Steward Malta Limited, Steward Malta Management Limited and Steward Malta Assets Ltd.
The accounts show that Vitals Global Healthcare received €29.55 million from the government in 2016 plus a further €416,667 as an allocation for the air ambulance. It also declared revenue of €4.25 million from the concession agreement, up from an income of €670,000 in 2015, as well as a further €4.4 million as “other income”.
'I hope NAO report will be earlier rather than later'
Questioned about the millions plunged into the hospital concession by the government, Prof. Scicluna argued that ever single penny given to the concessionaire was approved by parliament in the budget vote.
When Times of Malta pointed out that the key point was what happened to the government’s money once it was given to VGH, the finance minister said the money handed over to the concessionaire mostly went to pay doctors and nurses, who used to be paid directly by the government.
He said the National Audit Office was examining the original deal, signed off by former minister Konrad Mizzi, for any irregularities.
“I look forward to their report, earlier rather than later, as timing is of the essence”, Prof. Scicluna said.
Both Steward Healthcare and the government are in discussions to re-negotiate the deal, with the American concessionaire reportedly demanding more taxpayer money.
The 2016 accounts show that Vitals spent €25.8 million on wages for staff and almost €2 million for subcontracted staff, with a total cost of labour amounting to almost €28 million. In 2016, the group said it had 1,402 full-timers and 19 part-timers.
The group paid directors more than €1 million. Vitals’ directors at the time were Sri Ram Tumuluri and Mark Pawley before their resignations on February 16, 2018. Steward Malta’s CEO, Armin Ernst, was also CEO of Vitals in 2016.
An inquiry into the deal, sparked by NGO Repubblika, is under way, despite objections by Prof. Scicluna and former ministers Konrad Mizzi and Chris Cardona.
A court case against the government instituted by Opposition leader Adrian Delia, asking for the concession agreement to be rescinded, is pending.
According to an NAO spokesman, their investigation into the deal is expected to be concluded by year’s end.
The request for the investigation into the 30-year concession, worth more than €1 billion, was made by Parliament’s public accounts committee in November 2016.
Times of Malta reported that a partner of Nexia BT, the audit firm that secretly set up Panama companies for former government officials Keith Schembri and Konrad Mizzi, sat on the committee that evaluated proposals to run the three hospitals.