Gozo healthcare boss seeks buyers for €50 million renewable energy stake

Two entrepreneurs indirectly connected by the Gozo hospital private-public partnership are seeking €50 million in equity for a renewable energy project

Vitals Global Healthcare director Sri Ram Tumuluri with health minister Chris Fearne
Vitals Global Healthcare director Sri Ram Tumuluri with health minister Chris Fearne

Two entrepreneurs who are indirectly connected by the Gozo hospital private-public partnership, are seeking €50 million in equity for a renewable energy project.

Vitals Global Healthcare director Sri Ram Tumuluri, and Pakistani businessman Shaukat Ali Chaudry, gave a presentation of their plans to a Norwegian renewables firm’s chief officer.

The two men were looking to sell a 24% stake in a renewable energy project.

Tumuluri, a director of the company that will run three Maltese state hospitals, which will also be used to host medical tourists, has told MaltaToday the renewables project is unconnected to Vitals Global Healthcare.

But he confirmed that he was looking to raise €50 million in equity for a renewables energy project unconnected to Malta.

At the Norwegian presentation, Shaukat Ali Chaudry – who is connected to Vitals through its main funding partner, Bluestone – was also present.

“They also spoke of Vitals Global Healthcare and what they were doing in Malta,” the chief officer said, who was surprised at how the businessmen had come up with a €2.8 billion valuation of their Malta healthcare PPP. “They valued VGH at €2.8 billion, so it made sense... It was a good presentation and they liked to talk, but the figures they talked about were unrealistic,” the company official said.

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.

In comments to MaltaToday, Tumuluri said the €2.8 billion valuation was not a reflection of the present situation. “Vitals hopes to expand within the next five years and take control of some 5,000 beds in other projects, which we believe would be valued at some €2.8 billion in terms of operations,” the Canadian businessman said.

Tumuluri said Shaukat Ali Chaudry was involved in renewable energy projects in Europe and India, and reiterated that their joint operation was unconnected to Vitals. A spokesperson for VGH also confirmed the company had no relation to this meeting nor to any other energy projects. “Dr Armin Ernst is the CEO of VGH, and his team are focused on delivering VGH commitments to Malta and will continue to do so.”

Bluestone connection

Although Vitals Global Healthcare will be playing an important role in part of Malta’s healthcare – offering geriatric care, as well as using state hospital Mater Dei to train doctors from Queen Mary University of London – the origins of their funding are still unclear.

The Labour government has been unwilling to publish the agreement with the company before a substantial lapse of time. The Union Haddiema Maqghudin has filed a judicial protest demanding the publication of the contract.

The connection between Tumuluri, a Vitals director and the ‘face’ of the company here, and Shaukat Ali Chaudry, is a British Virgin Islands registered fund called Bluestone Special Situations 4 Limited that is actually a private equity fund based in Singapore and managed by the Oxley Group.

The new Gozo General Healthcare, to be constructed by Indian construction giant Shapoorji Pallonji
The new Gozo General Healthcare, to be constructed by Indian construction giant Shapoorji Pallonji

In December 2014, Oxley’s founder Mark Pawley opened a Malta subsidiary – Bluestone Investments Malta – with Tumuluri as its director.

The company then branched out: with Tumuluri as director in May 2015 it opened subsidiaries Vitals Global Healthcare, Vitals Global Healthcare Management, and Vitals Global Healthcare Assets.

With Shaukat Ali Chaudry’s own Malta company, Pivot Holdings, Bluestone 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. 

Secret agreement

The secrecy with which the government has jealously guarded the agreement with Vitals Global Healthcare inevitably raises serious questions about the funding of the private-public partnership, as well as the degree to which Vitals were given a ‘done deal’.

For example, Queen Mary University of London signed an agreement with the government to open a Gozo hospital campus in March 2015, when the request for proposals to upgrade and take over management of the three hospitals had not yet been issued.

Vitals were formally created in May 2015, but Bluestone had already planted its Malta flag back in December 2014.

When the bids came in May, Vitals fended off ‘competition’ from small outfits BSP Investments, owned by two Maltese businessmen; and Indian hospital group Image, of Hyderabad.

Vitals have roped in a Canadian construction company, Minaean – an affiliate of the Indian engineering giant Shapoorji Pallonji Group – to build a 450-bed hospital for Gozo and renovate the other two Malta hospitals for a total €210 million cost.

Shapoorji Pallonji opened its Malta branch in February 2016 (it is also registered at Crossbow House in Fgura).

According to the agreement signed in January 2016, Vitals is described as having a “strong track record in healthcare” – a claim perhaps only backed up by the medical muscle that Vitals has roped in from the USA, namely Partners HealthCare of Massachusetts General Hospital and Brigham and Women’s Hospital.

An alleged “due diligence” report whose text Malta Independent columnist Daphne Caruana Galizia reproduced in her blog, suggests that both Tumuluri and Shaukat Ali would have approached the Maltese government in late 2013 – ostensibly floating the business opportunity to take over the running of the hospitals.