Issue link: https://maltatoday.uberflip.com/i/1217481
5 maltatoday | WEDNESDAY • 4 MARCH 2020 NEWS CONTINUED FROM PAGE 1 Tumuluri, who headed the ill-fated consortium of investors granted a lucrative 30-year con- cession to run three state hospi- tals, 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 Mal- taToday 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 state- ment or report claiming otherwise is false." A spokesperson for Steward Healthcare, the company that ac- quired 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". But Steward has so far not ex- plained how Vitals' directors' re- munerations 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. 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 au- ditors 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 as- sets by €8.9 million. Tumuluri told MaltaToday he could not explain the way VGH had amassed liabilities of well over €8 million by 2017. "MrTumuluri does not have a copy of the audit- ed financial statements released by new VGH owners. Any ques- tions on this will need to be direct- ed directly to Steward Malta for comment," his spokesperson said. Tumuluri however did confirm that Vitals had a performance bank guarantee of €9 million in place as required by the govern- ment concession agreement. 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 fi- nancing to keep the concern go- ing. 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 en- ergy project outside Malta, and claimed their Malta healthcare PPP was valued at €2.8 billion. But in 2016, Steward Malta's au- ditors 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 as- sets 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 con- cession, 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 renego- tiated contract. "Adjustments of certain terms of the contract are necessary to se- cure the viability of the concession and financing of the capital pro- jects in the long term, a fact that has not been disputed by minis- tries or government over the last year while continuously reviewing financial data provided by Stew- ard Malta." No explanation yet on VGH directors' fees JAMES DEBONO DOZENS of Nadur residents living in the Gozitan village's street of Triq il-Knisja and other central parts have been ap- proached by lawyers claiming their hous- es do not belong to them. The lawyers, believed to be acting for the heirs of the late Richard Stag- no Navarra, have told the residents their homes and properties are being claimed on the basis of documents dat- ing back to the 1600s, a time when most of these properties did not even exist. MaltaToday is informed that some farmers have already ceded their land while other property owners have been told to pay up or leave. The lands in question have also been mysteriously registered with the Lands Authority; some residents have protest- ed the manner in which the registration was carried out unbeknownst to them. According to different sources, the claims are being made by heirs of the late Richard Stagno Navarra and are be- ing pushed by a number of top Gozitan lawyers. Nadur mayor Edward Said expressed his preoccupation on the situation, con- firming that he has been approached by a large number of anguished residents following the "registration with the Lands Authority of large parts of Na- dur." "Just imagine the shock they feel when they are told that their own home is owned by someone else… Many of these people have nothing else and lack the resources to counteract these claims," Said told MaltaToday. Said described the situation as "cha- otic" with residents being shocked that their land has been registered by other people. In a Facebook post, Said described the registrations "as a threat to the liveli- hood of the residents by persons who do not even know where Nadur is, let alone which land in Nadur is theirs." Said promised his full assistance to residents even of the matter does not fall under the jurisdiction of local councils. The matter will in fact be discussed in today's council meeting. He also promised to raise the mat- ter with the authorities including par- liamentarians from both sides of the house to ensure that the homes and property of Nadur residents is not im- pacted by these claims. Nadur residents shocked as new owners register their homes Vitals Global Healthcare director Sri Ram Tumuluri with health minister Chris Fearne