Vitals investor again tries to stop hospitals concession sale to American company

An investor who formed part of the team that proposed the part-privatisation of three Maltese State hospitals has filed a second warrant of prohibitory injunction against Vitals Global Healthcare and its controlling company Bluestone Investments.

Ashok Rattehalli wants to stop VGH from selling the hospitals concession to Steward Health Care.

The injunction was filed today, a month after Rattehalli withdrew an identical injunction after having been given assurances that his interests as a shareholder in VGH would be protected.

However,  Rattehalli is now fearing that he would be left with nothing despite his agreement with Sri Ram Tumuluri and Mark Pawley, two other investors.

Rattehalli, says he had been one of the group of technical, administrative and financial consultants who prepared the offer for the management and administration of a number of hospitals in Malta and Gozo in 2014, before the government had issued a request for proposals to part-privatise St Luke's, Karin Grech and Gozo hospitals.

Read also: Refusals from Allianz, Deutsche Bank left Vitals with no choice but to sell

The offer had been formulated and then presented by Bluestone Investments Ltd, a company he said was set up specifically for the project, and which was eventually awarded the contract.

As soon as Bluestone won the contract, reads the court application, a company called Vitals Global Healthcare Ltd was set up, registered in Ta Xbiex. The company was to oversee the management of the hospitals and bring the project to fruition.

Bluestone Investments is the sole shareholder in Vitals Global Healthcare (VGH) and Rattehalli said this led to the reasonable assumption that it has absolute control over the company.

Rattehalli had served on the medical board and the operating management team of this project and was contractually entitled to an offer for the allotment of shares equivalent to 5% of the shares in NewCo - which later became Vitals Global Healthcare - on the day of the entry into the concession agreement.

VGH entered into a delivery agreement concession for the provision of healthcare and ancillary services at St. Luke’s Karin Grech and Gozo hospitals on 30 November 2015.

But despite the agreement, Rattehalli says, he was never offered to buy or transfer shares in VGH as stipulated in the contract.

The applicant says he recently received information that Vitals Global Healthcare is going to be sold to third parties, a fact which, would prejudice his rights as majority shareholder in VGH, which would then be unable to honour its obligations under the agreement. He had applied for, and was provisionally granted, an injunction in this regard last December.

He had been verbally promised that his rights would be honoured “in the spirit of good faith” and convinced to revoke his injunction. “But despite this show of good faith on the part of the applicant, the defendant companies gave no substantive guarantee to him that his rights would be recognised and protected and worse, once VGH would be sold to third parties, his rights would not be recognised as the third parties would have no contractual relationship with him, leaving him without a legal remedy.”

In the application for the second injunction, filed by lawyer Peter Fenech this morning, he asked the court to prevent VGH or Bluestone Investments from selling or entering into any agreement with third parties over the transfer of his shares in VGH.