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[WATCH] Secrecy of Vitals Global Healthcare ownership dominates TV debate

Health minister Chris Fearne unable to provide names of ultimate beneficiary owners of Vitals Global Healthcare • VGH chief executive Armin Ernst insists company structure 'fully compliant with international law' 

tim_diacono
Tim Diacono
3 November 2016, 11:23pm
Health Minister Chris Fearne and shadow health minister Claudette Buttigieg lock horns on Xtra (Photo: Chris Mangion)
Health Minister Chris Fearne and shadow health minister Claudette Buttigieg lock horns on Xtra (Photo: Chris Mangion)
Health minister Chris Fearne did not reveal the ultimate beneficiary owners of Vitals Global Healthcare – the private operators of the St Luke’s, Gozo and Karin Grech hospitals.

During Thursday night’s programme of XTRA, Fearne was quizzed about the identity of the ultimate beneficiaries by host Saviour Balzan, shadow health minister Claudette Buttigieg, Malta Medical Association secretary-general Martin Balzan, and medical student Alex Clayman.

He responded by saying that the mother company of VGH – Bluestone Special Situations 4 – is managed by the Oxley Group, a Singapore-based investment company.

“It has fund managers who pour billions of euro into it,” he said, while insisting that the government had conducted due diligence tests on VGH.

Vitalis 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.

“We ware talking about boxes inside boxes inside boxes, which is ultimately owned by a company registered inside the British Virgin Islands,” Buttigieg said.

However, when Saviour Balzan noted that thousands of nominee companies are set up in Malta, she said that the two issues were “completely different”.

READ MORE: What VGH deal will mean for Malta's healthcare system 

Buttigieg said that the deal stank of corruption, arguing that VGH’s companies were registered in Malta a few days before then health minister Konrad Mizzi had announced them as the preferred bidder 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. On 19 May this year, Konrad Mizzi – who had already been deposed as health minister - signed a side-letter to the contract with VGH director Ram Tumuluri.

However, Fearne countered that the preferred bidder was actually announced on 9 September, and that the tender had closed on 19 May, to which three consortiums had bidded.

(Left to right) MAM secretary general Martin Balzan, MUMN secretary general Colin Galea, medical student Alex Clayman
(Left to right) MAM secretary general Martin Balzan, MUMN secretary general Colin Galea, medical student Alex Clayman
XTRA is presented by MediaToday's managing editor Saviour Balzan
XTRA is presented by MediaToday's managing editor Saviour Balzan
“Her entire argument falls flat because she got the dates wrong. If Claudette Buttigieg or anyone in the PN has any proof of wrongdoing, then they should go to straight to the police. If they don’t have any facts to present, then they shouldn’t say anything.”

‘Vitals deal is a joke’ – MAM chief

During the debate, Martin Balzan tore into the government’s deal with Vitals, warning that “no serious bank will lend millions of euro to a letterbox company whose owner’s name is shrouded in secrecy” and calling on the health minister to “come clean”.

He said that VGH doesn’t even have its HR department or procurement department, and that the government is purchasing all its medicines and apparata for the company.

“It’s a joke, all serious hospitals have their own procurement departments,” he said, over shouts from Fearne that “you have no idea what you are talking about”.

Medical student Alex Clayman said that something was obviously “dodgy” about the contracts, arguing that the deal wouldn’t be discussed on live TV if everything was above board.

“I cannot say what’s wrong inside the contract because half of it has been blotted out. People aren’t stupid, they know that theres something dodgy about this whole process.”

‘Our company structure is compliant with international law’ – Vitals CEO

VGH chief executive Armin Ernst insisted his company's structure is fully compliant with international law
VGH chief executive Armin Ernst insisted his company's structure is fully compliant with international law
When asked about his company’s ultimate ownership in a filmed interview, VGH chief executive Armin Ernst said that “the company structure is compliant with international law”.

“We have a huge commitment to Malta and to the Maltese community, and have brought a lot of professionals over here to guarantee that we will deliver what we have promised,” he said.

Ernst described VGH as a company that “aims to transform how healthcare is being delivered”.

“It is not a company that tries to go it alone, but rather through partnership. We have entered a partnership with the Maltese government, that will see us pool in our expertise, investment and management, and the government contribute its facilities.

He added that VGH has entered into separate strategic deals, including with US medical consultancy firm Boston Healthcare. 

tim_diacono
Tim Diacono is a journalist at MaltaToday
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