Steward and Vitals' Malta hospitals deal annulled as 'fraudulent' by Maltese court

A Maltese court, in a 136-page judgment after 44 hearings, annulled the privatization of St Luke's, Karin Grech and Gozo hospitals as 'fraudulent' and ordered them returned to the government within three months, in the case filed five years ago by MP Adrian Delia. Times of Malta quotes Mr Justice Francesco Depasquale: Vitals Global Healthcare used 'well-pre-conceived tricks and manoeuvres' to win the 2015 concession, and its successor Steward Health Care intended to 'unjustly enrich itself at the expense of citizens', with conduct that was 'possibly criminal'.

The court, adopting the auditor general's timeline, found VGH investors' October 2014 memorandum of understanding bound the government not to negotiate with anyone else, then used the information it yielded to submit a proposal that 'could not but be accepted'. Vitals claimed financial leverage running into billions of euros while its sole financial source was a local bank whose primary shareholder was the government — 'taking all for a ride'. Of three bidders in May 2015, only VGH included a bid bond; the evaluation was 'slack and totally unprofessional, almost amateurish'.

Steward, which took over the concession, was condemned for lacking respect for its obligations and the judicial process. Its evidence that it had met contractual milestones amounted to a one-page affidavit and 76 pages of photographs showing a new helicopter and a refurbished toilet — what the court called a 'poverty of investment, projects and future plans'. All defenses were rejected, including arguments over the legal basis of the MP's case and the defendants' attempts to escape responsibility.

Steward Malta bears all expenses; St Luke's, Karin Grech and Gozo hospitals revert to the government within three months; behaviour called 'possibly criminal'.

VGH's investors used a confidential October 2014 MoU to lock out rivals, then submitted a proposal built on the information it gave them.

The evaluation committee never assessed VGH's financial due diligence, relying on 'letters of comfort' while the sole funding was a government-majority bank.

Only one of three 2015 bids carried a bid bond, making VGH the only eligible winner of a contest the court called part of the plan.

Steward knew of the litigation when it took over and still sought to profit from 'the fraud committed by its predecessor', the judge found.

A bid built on inside information and fake leverage can win a concession, but a fraud finding unwinds everything years later — and taking over a tainted contract inherits the taint.

The concession and its three related instruments — the services concession, health services delivery and labour supply agreements — were annulled, with the Principal Notary to Government to publish the deed of rescission within three months and all expenses borne by Steward Malta Limited. Lawyers Edward and Nicholas De Bono assisted Delia. The court also held that every MP and the attorney general have a continuing duty to scrutinize transfers of public property used for essential services.