[WATCH] Nationalist Party demands parliamentary scrutiny of hospital contracts

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The PN has called on the health parliamentary committee to scrutinise the contracts signed between the government and Vitals Global Healthcare that will see the latter take over management of St Luke's, Karin Grech and Gozo's General Hospital.

Citing Canadian court documents, PN election candidate and radio host David Thake warned that VGH director Ram Tumuluri was previously in charge of a Canadian hotel but quit just before it went bankrupt.

He said that the documents show that he failed in his obligations to pay VAT to the Canadian authorities, that he had deleted the company's accounting records, and that he had stolen credit card deposits for guests, leaving the hotel with no cash to refund them.

"When he was in Malta last year, Tumuluri said that none of the companies he ever managed ever went bankrupt and he is technically correct," Thake told a press conference. "However, his Canadian company [T&V Hospitality Inc] had accrued more debt than assets, and Tumuluri quit before it filed for bankruptcy and was struck off the Companies Register."

During a recent live show on Switch Radio, Thake phone-called an unnamed Canadian venture capitalist who Tumuluri had once tried to source funds of.

The investor recounted how Tumuluri – previously head of housekeeping at a motel in British Columbia – had grouped  together a bunch of investors to take over management of the Nita Lake Lodge – a boutique hotel in the mountains of Whistler - that was being administered by HSBC.

The Nita Lake Lodge in Whistler, Canada, that used to be managed by Ram Tumuluri

While the hotel’s fortunes flourished during the 2010 Winter Olympics in Vancouver, Tumuluri was unable to keep his finances afloat afterwards.

“It was here that he asked me to invest in the hotel. When I saw it, I thought ‘Holy shit, how can someone not manage to make money out of this?’. However, the problem is that it’s very expensive to maintain, which means that it requires expertise and a vision to lead – which Tumuluri didn’t have.

“When the going got tough and the hotel was facing several liabilities, Tumuluri – the sole signatory of the company’s cash-flow walked away, leaving a $200,000 VAT bill unpaid and taking deposits that guests had paid the hotel with him.”

‘Obvious stench of corruption around the deal’

Shadow health minister Claudette Buttigieg warned that “a stench of corruption” surrounds the deal. To back up her argument, she said that VGH was registered as a Maltese company a few days before then health minister Konrad Mizzi had announced VGH as one of the preferred bidders in May 2015.

She also noted that the contract was signed on 30 November 2015, two days before audit firm Nexia BT partner Karl Cini had e-mailed Mossack Fonseca, instructing the Panamanian law firm to open offshore companies for Mizzi and OPM chief of staff Keith Schembri.

In the crosshairs: VGH director Ram Tumuluri (left) with health minister Chris Fearne

Vitals Healthcare Ltd is owned by Bluestone Investments Malta Ltd, which is in turn owned by Bluestone Situation 4 Ltd – registered as an offshore company in the British Virgin Islands. Health minister Chris Fearne confirmed on Xtra last week that Bluestone Situation 4 Ltd is managed by the Oxley Group, a Singapore-based investment company.

However, shadow Gozo minister Chris Said questioned who the ultimate beneficiary of Oxley is, and claimed that the government had held discussions with the group before even issuing a call for tenders for the hospital privatisation project.

“This in itself renders the call for tenders null and void,” Said said, while claiming that Tumuluri had already told people that Oxley was going to take charge of the hospitals before the call was even issued.

Moreover, he questioned why Tumuluri has signed contracts on VGH’s behalf, instead of the company’s chief executive Armin Ernst. 

‘PN wants to turn the clock back on healthcare’ – Chris Fearne

In his response, health minister Chris Fearne did not directly refer to the serious allegations that were cast against Tumuluri, instead claiming that the Opposition are repeating false stories and that they want to turn the clock back on healthcare

“As a result of his bitterness, Busuttil wants healthcare in Malta to return to the state in which the previous administration had left it,” he said. “The government is ready to take the necessary decisions for Malta and Gozo to have a world-class healthcare system.”

He added that the agreement with breathe life into three hospitals that the previous PN administration had abandoned, granting patients access to free and high-quality healthcare.