Tumuluri tells U.S. Congress that Steward boss boasted about bribing Malta politicos
Former VGH chief claims Steward boss Ralph de la Torre boasted that he could issue ‘brown bags’ to government officials if necessary to close transactions
The one-time CEO of Vitals Global Healthcare, the private-public company hand-picked by the Muscat administration to run three state hospitals, has alleged that Steward boss Ralph de la Torre boasted he could bribe Maltese government officials to close deals on the hospitals PPP.
Steward took over in 2017 from VGH after the company failed to secure financing to achieve its contractual milestones on the St Luke’s, Karin Grech, and Gozo hospitals.
Now Ram Tumuluri, the face of VGH, has claimed in the United States Congress that Steward Health Care CEO Ralph de la Torre and other Steward executives illegally conspired with foreign officials to secure the hospital contract.
“In touting Steward’s supposed competitive advantage in Malta… de la Torre boasted that he could issue ‘brown bags’ to government officials if necessary to close transactions,” Tumuluri wrote in a complaint to Congress, shared with CBS News.
‘Lawful whistleblower’ Ram Tumuluri denies giving money to Joseph Muscat
In the submission to the U.S. Senate committee investigating Steward’s collapse in the U.S., Tumuluri describes a 2017 meeting involving the Steward CEO and alleges de la Torre was “insinuating he would bribe officials of the Government of Malta.”
A spokesperson for de la Torre called Tumuluri’s allegations “preposterous” and said Steward’s international arm acted “in a lawful and transparent manner throughout the period in which the company was operating Malta.”
Tumuluri’s company won the controversial contract to run three of Malta’s public hospitals in 2015.
In his complaint to Congress, Tumuluri alleges de la Torre and other executives “conspired with” Maltese officials on a “campaign of unlawful coercion” to gain control of the contract Tumuluri’s company had won in 2017.
The 500-page letter claims aconspiracy allegedly involved an effort to have Tumuluri arrested and even repeated death threats aimed at him.
De la Torre’s spokesperson said Steward took over the Maltese hospital contract only after Tumuluri’s company “failed to deliver on its promises” and government officials were looking to replace it.
VGH concession
By 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 Steward Malta’s auditors later said that VGH was already in 2016 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 assets by €8.9 million.
Tumuluri markets 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 financing to keep the concern going.
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 energy project outside Malta, and claimed their Malta healthcare PPP was valued at €2.8 billion.
But in 2016, Steward Malta’s auditors 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 assets 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 concession, 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 renegotiated contract.
“Adjustments of certain terms of the contract are necessary to secure the viability of the concession and financing of the capital projects in the long term, a fact that has not been disputed by ministries or government over the last year while continuously reviewing financial data provided by Steward Malta.”
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