HomeBussinessVitals cash funded Technoline, with Schembri-Mizzi as intended owners

Vitals cash funded Technoline, with Schembri-Mizzi as intended owners


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A company that was granted an exclusive procurement contract by Vitals Global Healthcare (VGH) was destined to be owned by former chief of staff Keith Schembri and ex-minister Konrad Mizzi, among others, investigators in the Vitals PPP scandal believe.

The owners of Vitals Global Healthcare, previous media reports had revealed, had funded the takeover of Technoline through the use of a company, Gateway Solution. The acquisition was facilitated by Technoline’s marketing director, who used a loan from the VGH shareholders to his personal business Gateway Solutions to acquire the company.

But it appears that from July 2015 onwards, Joseph Muscat’s former chief of staff Keith Schembri and former minister Konrad Mizzi, together with associates, were intended to be the owners of Gateway Solutions, while subsidiary Technoline got to enjoy exclusivity to supply VGH with medical equipment.

“We found evidence that a mechanism involving offshore companies and nominees was constructed to enable Ivan Vassallo to appear to be the owner of the Technoline Group,” the magisterial inquiry found.

Just weeks after the award of the hospitals concession to VGH in July 2015, Nexia BT partner Brian Tonna scheduled a meeting with Pierre Sladden – an associate of Keith Schembri – to discuss the Technoline acquisition.

At the same time, Ivan Vassallo was setting out detailed plans for the proposed shareholding for Gateway “whereby we consider Keith Schembri, Konrad Mizzi, Pierre Sladden and Adrian Hillman were each allocated individual share holdings of 25%/22.5%.”

Both Hillman and Sladden were already associates of Keith Schembri in the carve-up of profits from the Kasco Group’s printing machinery supply to Progress Press, where Hillman was a director.

READ ALSO: Schembri, Sladden, Hillman set up Cypriot company for transactions to BVI offshore

So how did they get away with the Technoline acquisition?

Investigators say companies used a Jersey offshore – Vitals Procurement Ltd (VPL) – to issue a convertible loan note agreement for €5 million to Gateway.

“Using VPL created the pretense that it was private investor funds that were being used to finance the loan to Gateway. However, […] the funds originated from Vitals Global Healthcare Management, which effectively meant that the Maltese taxpayer had loaned out funds for the purchase of Technoline,” the inquiry finds.

Investigators say the plan was that VGH only “virtually” acquire Gateway, as can be seen from the acknowledgement by Vassallo for Gateway’s and Technoline’s public ownership to be incorrectly recorded at Malta Business Registry, which was further confirmation that Vassallo’s publicly recorded ownership of Gateway was “a sham”.

VGH Malta paid Gateway just over €5 million in February and April 2017, a cost funded entirely from the government concession.

That same year, Technoline’s annual turnover increased by 20%, or around €2 million, thanks to the VGH exclusive supply agreement.

Vassallo’s remuneration doubled from €50,000 to €100,000 upon Gateway’s acquisition of Technoline. “We consider the new salary packages for Vassallo and Mario Gatt which were agreed with Ram Tumuluri prior to the acquisition of Technoline, were part of the compensation package for their continuing assistance and Vassallo’s ongoing acquiescence in the various and highly unusual ownership arrangements that had been planned for Gateway since July 2015.”

Investigators noted that VGH’s exclusivity contract for Technoline could have been awarded at any stage prior to the Gateway share purchase. “VGH did not award the contract for legitimate commercial reasons. There was obviously a plan intended to ensure that Technoline would not benefit from such an exclusive contract until such time as its ownership could be handed over to Ivan Vassallo and, more importantly, his associates…  It appears obvious that there would have been little rationale for VGH to choose to reward a completely unrelated individual, Ivan Vassallo, with 100% of the profit on the entire supply chain operated by the hospitals concession.”

Inquiry: Hillman was Schembri’s ‘proxy’

The inquiry says the method of concealed ownership used with Gateway and Technoline “placed sufficient distance between Schembri and Mizzi while they were still able to directly influence government policy and decision making.”

Investigators believe the €5 million VGH paid to Gateway “represented embezzlement” from the concession for the benefit of Schembri and Mizzi “and to a lesser degree, Ivan Vassallo, Adrian Hillman and Pierre Sladden.”

Hillman, former director of Allied Newspapers and Progress Press, served as Schembri’s proxy on the Technoline deal, provided Schembri with sensitive details on the progress towards the purchase of Technoline.

Under this plan, 90% of the shares in Gateway would be held by Adrian Hillman, Pierre Sladden, Keith Schembri and Konrad Mizzi.

Schembri had previously secretly partnered with Sladden and Hillman using offshore companies in secrecy jurisdictions.

Redmap had been subcontracted by construction company Blokrete to carry out works on the Progress Press premises in Mrieħel, acquired in 2009 by the Allied Group, publishers of The Times and The Sunday Times.

Through their Cypriot offshore A2Z, over €300,000 would be levied in “consultancy charges” for Pierre Sladden’s construction company Redmap Limited, and subcontractor costs of €250,000 from another offshore Blue Sea: the yield was the €50,000 gross profit.

Investigators are yet to understand why Schembri, Hillman and Sladden used an offshore company to reap ‘consultancy’ profits from a company owned by Sladden. “Indeed, why the service arrangement needed such offshore secrecy also requires explanation. What in our opinion would make sense of the arrangement would be if Sladden and Redmap became involved in the Times of Malta building project only with the permission of Hillman and the influence of Schembri.”

Eurybates: grand looting

Ivan Vassallo was serving as a front in other companies, such as Eurybates, set up in September 2015, which investigators believe was a vehicle for kickbacks from other projects, such as a new major hospital construction project at Smart City, where Schembri held sway as an appointed government director.

Evidence suggests that its concealed ownership mirrored that of Gateway with 90% of the shares held for ‘K, K, AH & PS’.”

Investigators estimate that Eurybates derived around €1.9 million between 2016 and 2021 in kickbacks from major suppliers to the Concession: Sirimed SRL, Technoline, Ergon Technoline JV, Shapoorji Pallonji and CERS Group.

Sirimed had been tasked with works on the medical school campus in Gozo. Ergon-Technoline JV was awarded a tender to design and build the Paola Primary Healthcare Regional Hub. Shapoorji Ballonji was engaged to design and build projects at St Luke’s Karin Grech, and Gozo General hospitals.

Impaqt Limited, owned by Schembri’s Kasco Engineering, was transferred to former Kasco employee John Comerford in 2015, and then proceeded to provide consultancy to the health and energy ministry, always marking up their invoices by 44%. These contracts generated over €500,000 – €370,000 of which were sales to Mater Dei Hospital, and Karen Grech and Gozo hospitals.

Impaqt provided consultancy services to Eurybates between March 2019 and July 2020 at a rate of €6,000/€9,000 per month. The catch is that Schembri’s Kasco provided finance of around €80,000 to fund Impaqt.

The inquiry references data that reveals Kasco was initially in control of the company until August 2015, weeks after the concession was awarded to VGH. It was at this point that Kasco separated from the company, “which appears to us to be quite a coincidence”, investigators said.

Encore Trading Ltd is another company that is believed to have been under the control of Ivan Vassallo and Pierre Sladden as associates of Keith Schembri. The inquiry says the company received almost €100,000 as a kickback for the award of the Paola Regional Hub tender, as Encore’s share of income from the project had been agreed at a rate of 10% on the profits.

Moreover, Schembri seems to have also been connected to the Barts Medical School, in both its development and construction. The inquiry says significant bribes flowed out of these two contractors, and John Dalli and Keith Schembri may have set up deals with Shapoorji Pallonji ahead of the Concession.

Shaukat Ali’s nephew made new Technoline director

In late 2017, with plans to replace VGH with Steward already underway Shaukat Ali’s nephew, Yaser Ali Badar, was appointed as Technoline’s new director.

“We consider that installing Mr Badar as director allowed Shaukat Ali to retain a degree of control and oversight in Technoline in the post VGH era. In the process of selecting Mr Badar for the directorship, Mr Vassallo informed Mr Tumuluri that he had conferred with “the three other forces” on the matter.”

This, the experts said, indicates that in late 2017 Ivan Vassallo was still working under external control, despite him being the registered sole owner of Gateway and Technoline.

While not being able to confirm the identity of the “three other forces”, experts came to the conclusion, based on limited communication between Schembri and Vassallo, that they probably were Shaukat Ali, Asad Ali and Keith Schembri.

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