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American investors ordered to pay legal fees for failed St James bid

American buyers associated with Pakistani businessman also connected to Vitals Global Healthcare owners

matthew_agius
Matthew Agius
3 February 2017, 7:21am
The St James Hospital in Sliema: its owners were negotiating its sale with two American-Palestinian entrepreneurs
The St James Hospital in Sliema: its owners were negotiating its sale with two American-Palestinian entrepreneurs
The Maltese courts have upheld a claim filed by lawyers Michael Kyprianou (Malta) Ltd against the company Medical Health Management & Consulting, for services it rendered in the prospective sale of St James Capua Hospital.

Michael Kyprianou had asked the court to enforce a contractual clause entitling it to reimbursement, at an hourly rate of €100, for its services after the sale of St James Capua hospital did not go through.

When the St James deal fell through, Michael Kyprianou issued an invoice for €39,058 in April 2015, which had remained unpaid.

In November that year, the company filed a sworn application, explaining that it had been engaged by Medical Health Management & Consulting (MHMC) to negotiate the sale of St James Capua hospital. It explained that the sale was not concluded and it had therefore invoiced the defendant company for the 331 hours of work performed, at the contractually agreed rate of €100 per hour. VAT at 18% accounted for the remaining €5,958.

As MHMC and its representatives had never appeared in court to contest the case, the court upheld the claim.

According to documents submitted in court, legal representation of MHMC is vested in Syed Imranullah and Irfan Iqbal, both US citizens. Had the sale been successfully completed, Michael Kyprianou stood to earn 0.5% of the value of the sale and any business subject to it. 

Vitals ‘connection’

According to company records, MHMC is owned by the New York company Healthcare Information Technology Consulting Group (80%) and Shaukat Ali Chaudry (20%), a Pakistani businessman and resident of Malta. HITCG is in turn owned by Irfan Iqbal and Syed Imranullah, both of New York.

At this intersection of the business world, Shaukat Ali Chaudry’s name also crops up in interests affecting Malta’s private and public healthcare system: he is connected to Vitals Global Healthcare, the company that will run three small Maltese hospitals, through VGH’s main funding partner, Bluestone.

In December 2014, VGH’s owner Oxley Capital, an investment management firm, opened Bluestone Investments Malta. In May 2015, the company opened subsidiaries Vitals Global Healthcare, Vitals Global Healthcare Management, and Vitals Global Healthcare Assets

But with Shaukat Ali Chaudry’s own Malta company – Pivot Holdings – Bluestone also opened Crossrange Holdings, a company that owns Gozo International Medicare, and Gozo Global Healthcare. All companies were also opened in December 2014.

All these Bluestone subsidiaries share the same audit firm, Crossbow Services.

On his part, Shaukat Ali also owns Global Assets Holdings, a company opened back in 2010, and Medical Health Management & Consulting, which he opened in November 2014.

MaltaToday had also reported that Shaukat Ali Chaudry and Vitals’ director Sri Ram Tumuluri had embarked on a private venture, seeking €50 million in equity for a renewable energy project.

The two men gave a presentation of their plans to a Norwegian renewables firm’s chief officer, to sell a 24% stake in a renewable energy project, which was unconnected to Vitals Global Healthcare or Malta.

But both men spoke of the Vitals PPP being valued at €2.8 billion in Malta. Vitals Global Healthcare will be refurbishing and expanding the Gozo general hospital, as well as the Karen Grech and St Luke’s hospitals to provide beds for both Maltese patients as well as paying foreign patients. They are expected to invest over €200 million in the project, but the government will also finance the outsourcing of health services to the tune of €50 million a year.

St James sale

The prospective sale had made the news in 2015 when the company, owned by former Nationalist MP Josie Muscat, had to deny claims that it wanted to divest itself of burdensome operations in Libya.

Muscat’s son and managing director Jean Claude Muscat had stressed that the international operations were always run by a separate and distinct company managed separately from the Maltese operations.

“The truth is that the international operations of St James Hospital are managed by a separate structure which focuses specifically on the operations in Libya and Hungary.

“Saint James Hospital International did face difficult times four years during the Arab Spring Revolution and is facing difficult times today with the current domestic turmoil in Libya. However this has not placed any burden whatsoever on the local operations of the Group.”

Additional reporting by Matthew Vella

matthew_agius
Court reporter Matthew Agius is a Legal Procurator and Commissioner for Oaths. Prior to re...
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