Issue link: https://maltatoday.uberflip.com/i/1219206
4 maltatoday | SUNDAY • 8 MARCH 2020 MATTHEW VELLA VITALS Global Healthcare was a financial mess in 2017. Just two years earlier, a mys- terious group of investors had clinched a 30-year concession to run three Maltese state hospitals in a bogus 'request for proposals' tender run by Project Malta, the privatisation arm under former minister Konrad Mizzi's pur- view. By mid-2017, VGH was still without the necessary banking finance to take its project for- ward, a private hospital con- cern that would deliver a public healthcare commitment while making profits from a lucrative medical tourism component. And yet, despite the existence of multi-million debts, and now even the suspicion of inflated consultancy fees being charged to expenses, VGH's two direc- tors – the Canadian Ram Tu- muluri and Briton Mark Pawley – were about to sign off on a very lucrative payday. MaltaToday has learnt that in June 2017, Tumuluri and Pawley signed on a back-dated contract for their remuneration to bind Vitals to pay them exorbitant directors' fees despite no sign of clear progress on the hospitals concession project. Tumuluri's contract was that he be paid €600,000 annually, for the three years since the start of the concession – €1.8 million in total; as well as a €5 million bonus for the third year of the concession. Tumuluri has claimed through a spokesperson in London that he had "deferred" his salary and bonus to the company. But a source close to the concession insists that Tumuluri was paid as part of a settlement in 2019. Even Mark Edward Pawley, whose Bluestone Investments in the British Virgin Islands was set up as the ultimate beneficial owner of the Vitals group, was ensured a higher-than-normal directors' fee: €400,000 annually. So the two directors hastily drew up a contract that would pay both of them €1 million each year, on a project which was now destined to fail. Such was the precarious state of Vitals in 2017, that the new concessionaires, Steward Healthcare, discovered in 2018 that Tumuluri had never carried out any substantial accounting of the VGH operations, which is why it is only recently that the American company submit- ted accounts for Vitals' first two years. MaltaToday can reveal that in the very year that Tumuluri and Pawley claimed for themselves a combined €1 million in direc- tors' fees, Vitals' total liabilities had exceeded assets by €27 mil- lion, with losses for that year alone amounting to €18 million. But Steward finally paid Paw- ley and Bluestone a €9 million settlement to take over the con- cession, which together with Tumuluri's claim amount to just over €15 million paid to the for- mer investors. But how had Vitals amassed so many losses without having achieved any substantial mile- stones in its hospitals project? NEWS era.org.mt Environment & Resources Authority Hexagon House, Spencer Hill, Marsa. CAREER OPPORTUNITY CHIEF EXECUTIVE OFFICER Jobs Plus Permit No. 136/2020 The Role • • • Engage with all key stakeholders. The Person • • • • • Experience of policy and strategy development with results-oriented mind-set; • • The candidate should have a Bachelor's Degree (MQF Level 6) as recognized by NCFHE. Preference will be given to individuals who are also in possession of a Masters' Degree (MQF level 7) in management or equivalent; • Vitae via email on vacancies.era@era.org.mt by noon of 13th March, 2020 (CET). Human Resources Unit Environment and Resources Authority Email: vacancies.era@era.org.mt Tumuluri drew up contract in 2017 for a €600,000 annual salary. Then Vitals bailed What happened to Vitals in 2017 Income, mainly from government €75 million Expenditure €94 million (of which 'other expenses') (€24 million) Losses for the year €18 million Accumulated losses €27 million