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MALTATODAY 2 January 2022

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2 maltatoday | SUNDAY • 2 JANUARY 2022 NEWS Shapoorji contest €8.39 million tax bill Thank you... for having bought this newspaper The good news is that we're not raising the price of our newspaper We know times are still hard, but we have pledged to keep giving our readers quality news they deserve, without making you pay more for it. So thank you, for making it your MaltaToday Support your favourite newspaper with a special offer on online PDF subscriptions. Visit or scan the QR code Subscriptions can be done online on Same-day delivery at €1 for orders up to 5 newspapers per address. Subscribe from €1.15 a week Same-day print delivery from Miller Distributors mt CONTINUED FROM PAGE 1 The plaintiff company was incorporated in Malta on 8 February 2016, with the in- tention of carrying out works agreed in the contract, as well as subcontracting out aspects of the job, as re- quired. Eventually Steward Health Care International Holdings took over control of Vitals in Malta and declared that it wanted to renegotiate the contract with Shapoorji. Subsequent to this, Steward unilaterally terminated the agreement, leading to more controversy, which Shapoor- ji said was being discussed by the parties out of court. The Indian company claims that under a clause in the contract, Vitals had bound itself to pay a €25 million advance as a guarantee. The clause, which reads: "such advance shall be repaid by deducting an amount in proportion to the progress of work from each Bill until such advance has been re- paid in full. If on the date of issuance of the Certificate of Substantial Completion the entire amount of the advance has not been repaid, the Em- ployer may deduct the bal- ance from any payments due to the Contractor thereafter. If the balance exceeds the payments then due, the Con- tractor shall promptly pay such excess to the Employer. If the Contract is terminat- ed… any underpaid balance of the Advance shall be re- paid promptly to the Em- ployer." The company's lawyer Marlon Borg, argued that the first instalment paid was "effectively a security deposit and not payment for services or products consigned. Ergo, this invoice is defective in its form and was issued through a technical error." Shapoorji also alleged that Vitals had never paid the amount due to the company. American company Spe- cialized Engineering Solu- tions, along with a design consortium that included ar- chitects Heery Internation- al, Mediterranean Technical Services, and Shapoorji Pal- lonji, were hired on a €250 million redesign of the St Luke's and Gozo hospital campuses. In January 2018, the Tax Commissioner wrote to Shapoorji asking for a meet- ing as part of a credit con- trol exercise. The company supplied copies of all the in- voices in question. Shapoorji claims that in subsequent correspondence it became evident that Vi- tals had arbitrarily decided to renege on the contract and work directly with sub- contractors. It also claims to have evidence that these subcontractors were paid directly by Vitals. This is the subject of a separate lawsuit. In February 2021. The Tax Commissioner issued a no- tice under the VAT Act, claiming that the depart- ment was due €8,394,294.94 in unpaid tax. Shapoorji subsequent- ly filed the case in order to stop the notice from becom- ing an executive title, argu- ing that the Commission- er enjoys discretion as to whether or not to issue an estimate together before the notice. This had not been issued, depriving the debtor of the opportunity to appeal the tax estimate, said the company. The plaintiff said it could not understand under what reasoning the Commission- er had decided to issue the notice, asking the court to declare the notice issued by the Tax Commissioner as ir- regular and null due to the discretion being exercised unreasonably. It also requested the court to declare that the notice does not constitute an ex- ecutive title and therefore that the Tax Commissioner had no legal right to pursue legal action to enforce this vaunted right against the company. Shapoorji in Malta In May 2016, Daphne Caruana Galizia published a damning due diligence report on Vitals Global Healthcare, prepared by a leading consultancy firm on behalf of one of VGH's potential clients. The report claimed that Joseph Muscat's chief of staff Keith Schembri and Malta's ambas- sador to Dubai, Anthony Tab- one, had been in cahoots with Vitals's front-man Ram Tumu- luri and Pakistani businessman Shaukat Ali Chaudry – a former Gaddafi ally who relocated from Libya to Malta after 2011 where he set up his business network. According to the report, Schembri and Tabone prom- ised Shapoorji Pallonji and UAE-based Global Health Care that they would be awarded the hospitals privatisation pro- ject if they worked with Tumu- luri and Shawkat. Despite ini- tial misgivings over Tumuluri's shady finance structures, both companies eventually com- plied following a visit to Dubai by a "very senior former Mal- tese minister". Caruana Galizia claimed this was former European Com- missioner John Dalli, who had personally known Shaukat Ali from his time working in Libya. Dalli denied that such a meet- ing ever took place. While Vitals had no history in healthcare, the due diligence report had noted that Shapoor- ji had not been paid by VGH which had failed to raise any money as "no lenders are will- ing to lend to a shell company with no experience".

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