Former Vitals boss Ram Tumuluri: ‘I did not take my €5 million bonus’

The one-time chief executive officer of Vitals Global Healthcare, Canadian national Ram Tumuluri, has told MaltaToday he did not cash a €5 million bonus that he was entitled to on his third year at the helm of the hospitals’ concessionaire.

Tumuluri, who headed the ill-fated consortium of investors granted a lucrative 30-year concession to run three state hospitals, was slated for a scandalous bonus according to his contract: €5 million paid out on his third anniversary at the helm of VGH.

But Tumuluri has now told MaltaToday he never took the money.

“Although there was a contract clause for a €5 million bonus, he did not ever draw this from the company,” a spokesperson for the businessman said. “Furthermore, he did not take any salary from Vitals Global Healthcare, instead, choosing to defer it all in order to support the business. Any statement or report claiming otherwise is false.”

A spokesperson for Steward Healthcare, the company that acquired the concession from Vitals Global Healthcare in December 2017, said the company does not comment on the salaries of any members of staff, “no matter the history”.

Steward has so far not explained how Vitals’ directors’ remunerations skyrocketed from ‘just’ €1 million in 2016, to just over €6 million in 2017, according to audited accounts the company filed for Steward’s first three years of operation.  “The VGH management accounts were prepared in accordance with International Financial Reporting Standards (IFRS) and the Companies Law as required for many Maltese companies and by the the Concession Agreement with GoM. These accounts were certified by a qualified and properly registered Maltese auditor.”

On his part, Tumuluri insisted he deferred his salary and bonus when asked by MaltaToday what his salary at Vitals was.

In 2017, the VGH concession was paid €75 million to run the three hospitals, incurring over €94 million in expenses, generating losses of some €18 million.

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.

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.”