Vitals Global Healthcare boss Ram Tumuluri paid himself €5 million bonus

The one-time chief executive officer of Vitals Global Healthcare, Canadian national Ram Tumuluri, paid himself nothing short of a €5 million bonus on his third year at the helm of the hospitals’ concessionaire.

Diving headlong into a lucrative public-private partnership that gave the unknown VGH a 30-year concession to run three state hospitals, Tumuluri was paid the scandalous bonus in what MaltaToday has learnt was a condition in his contract: €5 million paid out to him on his third anniversary at the helm of VGH.

Yet it was in that third year of operation that VGH, a business owned in part by BVI-registered Bluestone Investment and minor investors, folded and sold off its concession to the US healthcare giant Steward.

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Sources close to the concession revealed that directors’ remuneration at Vitals skyrocketed from ‘just’ €1 million in 2016, to just over €6 million in 2017 – the difference being Tumuluri’s third-year bonus.

That same year, the VGH concession was paid €75 million to run the three hospitals, incurring over €94 million in expenses, generating losses of some €18 million.

Questions are now being asked of how far did the government and the ministry of health manage to retain some form of oversight on the operations of VGH.

The former concessionaire amassed millions in debt through a complicating offshore structure and used taxpayers’ money to purchase companies, according to Steward Malta, which said it had to carry out “forensic-type” accounting in a bid to establish reliable audits for the years 2015 to 2017.

Tumuluri is today marketing himself as a freelance investor and business consultant, yet nowhere on his personal website does he make any mention of his Malta project.

VGH, a consortium of investors brought together by the Pakistani business consultant Shaukat Ali Chaudry and run by Tumuluri, incurred such high levels of debt that it was unable to acquire financing to keep the concern going.

Yet the two entrepreneurs in 2016 were using their tax-funded concession to pitch their business acumen in Norway, where they sought out €50 million in equity for a renewable energy project. The two men were looking to sell a 24% stake in a renewable energy project outside Malta, and claimed their Malta healthcare PPP was valued at €2.8 billion.

But in 2016, Steward Malta’s auditors said that VGH was already facing a “material weakness [that] may cast a significant doubt on [its] ability to continue as a going concern.” The warning was made in the accounts for VGH for that year, when the concessionaire posted a net loss of €6 million, with total liabilities exceeding assets by €8.9 million.

“It is correct that throughout the period 2015/16/17 significant losses of over €25 million had been incurred by VGH. Defining the exact use of all funds during that period is not possible due to the convoluted nature of the organisational structure of the prior concessionaire and the lack of proper financial accounting, but a good picture has emerged,” a spokesperson for Steward had previously told MaltaToday.

Steward says it has spent $30 million to turn the concession around and has no cash flow problems. But it is now seeking a renegotiation of terms in the concession, which have been already partly hammered out in Castille under the aegis of former prime minister Joseph Muscat. Muscat himself accompanied Steward to a meeting with his successor, Robert Abela, and deputy PM and health minister Chris Fearne, to make a case for Steward’s renegotiated contract.

“Adjustments of certain terms of the contract are necessary to secure the viability of the concession and financing of the capital projects in the long term, a fact that has not been disputed by ministries or government over the last year while continuously reviewing financial data provided by Steward Malta.”