Issue link: https://maltatoday.uberflip.com/i/1499757
2 maltatoday | SUNDAY • 21 MAY 2023 NEWS Steward, Vitals and Joseph Muscat... The Steward-VGH hospitals saga was recast into the spotlight last week. From a National Audit Office report – the third instalment covering the transfer to Steward - to a journalistic collaboration that shed new light on the privatisation deal, NICOLE MEILAK tries to make sense of the revelations A deal spearheaded by Keith Schembri and Konrad Mizzi From collusion with VGH to discussions behind its back Muscat investigated over consultancy payments THE NAO report makes it clear that the deal was being spearhead- ed by former chief of staff Keith Schembri and then tourism minis- ter Konrad Mizzi. Correspondence submitted to the office showed that the CEO of Steward Health Care had writ- ten to Schembri as chief of staff, advising him that the health minis- ter, Chris Fearne, had contacted him for an update on the trans- fer of shares between VGH and Steward (SHC). The report also pointed to an "un- orthodox dynamic" between the prime minister at the time, Joseph Muscat, and Konrad Mizzi, to the detriment of the health minister's ability to negotiate with the SHC. The NAO said this delegation of responsibility was illogical, "creat- ing weakness where there ought to have been none". Most notable was the €100 million side agreement secured by Steward Health Care in August 2019 in case of court-declared nullity of the concession agreement. The NAO de- scribed this as "a situation precipitated by the Minister for Tourism and engineered through his mis- leading of Cab- inet". AN investigation by the Times of Malta, The Shift News, and OCCRP, an in- ternational organisation, re- vealed on Wednesday that a magisterial inquiry into the hospitals deal is also prob- ing Muscat's bank accounts and income declarations. Investigators suspect that his consultancy con- tract with Swiss company SpringX Media, which he secured soon after stepping down from prime minister in 2020, could have been used to disguise payments from the Malta hospitals deal. Muscat received con- sultancy payments from SpringX Media and Accutor Consulting, both registered at the same Swiss address. However, Accutor Con- sulting used to be called VGH Europe. It was switched to Accutor Con- sulting in January 2018, shortly before Steward Health Care took over the concession to run three hos- pitals in Malta. Under the full consultancy contract, Muscat was set to receive €540,000 across 36 monthly payments. But the payments stopped abruptly after four months, meaning Muscat netted €60,000 from SpringX Media and Accutor Consulting. Muscat started receiving money from the consultan- cy in March 2020. At this point, he was still a sitting member of parliament. He resigned as an MP in October that year. That summer, Muscat had been questioned by police over a statement given by Yorgen Fenech, who is in court for masterminding the murder of Daphne Caruana Galizia. In January 2022, police searched Muscat's Bur- marrad home and collected electronic devices as part of the ongoing inquiry. Muscat insists the consul- tancy contract was above board, documented and had nothing to do with the Malta concession. He has denied ever receiving mon- ey from corruption and the former prime minister has now filed a court request to have the inquiring magis- trate recuse herself, claim- ing that the information was leaked from the inquiry. WHEN evaluating the bids submitted for the concession in 2015, the NAO came across a letter submitted by VGH as proof of access to finance in the bid- ding process. A sanction letter present- ed for the bid, issued by the Bank of India for 'Malta Healthcare Projects', was dated 13 March 2015. But the gov- ernment's Request for Proposals was published on 27 March 2015. "The Office deemed this document as definite evidence of the VGH's prior knowledge of the planned project and proof of collusion with the government or its representatives," the report reads. VGH were awarded the concession and three years later, government be- gan discussing a handover of the con- tract with SHC behind VGH's back. "The incongruity of this situation is evident in that the concession was, at the time, owned by the VGH, yet the evidence at hand indicated interac- tions occurring between the govern- ment and the SHC, to the exclusion of the VGH." The NAO pointed out that the gov- ernment had requested a due diligence report on SHC well before receiving the request to transfer the VGH shares to SHC. Some risks were identified in the due diligence report, particularly con- cerns with respect to several senior ex- ecutives at SHC who were considered as PEPs due to close ties with the po- litical class, including former American presidents, congressmen and members of the Senate. The lynchpin was Armin Ernst, who after stepping down from his top posi- tion at VGH turned up months later as the CEO of Steward Health Care, push- ing for the American company to take over the Malta concession. Joseph Muscat and Steward Healthcare CEO Armin Ernst Keith Schembri Konrad Mizzi