We Spoke To The Man Who Made A Killing Off Vitals Deal And This Is How It Went
It was under a year ago now that Ivan Vassallo’s stock dramatically grew. Starting out as the sales and marketing manager of medical supply firm Technoline, he managed – in just a few months – to buy out the entire company and enter into a lucrative contract with Vitals Global Healthcare (VGH), the company tasked with running the St Luke’s, Karin Grech and Gozo hospitals. The question is how did he get the money?
Informed industry sources told Lovin Malta it must have cost Vassallo at least €5 million to buy out Technoline’s former owners. It soon turned out to be a worthy investment though; around three months after Vassallo took control of Technoline, VGH entrusted his company with the procurement of all of its medical supplies. The deal placed Malta’s other medical supply firms in a very awkward position – essentially forcing them to submit all supply bids for equipment at the three hospitals to a competitor.
Now, with VGH planning to sell its 30-year concession to major US private hospital operator Steward Health Care, all of the contracts it had signed with third parties – including Technoline – will also automatically be transferred to Steward. Steward has not yet responded to a request for comment from Lovin Malta on whether it intends to honour Vitals’ agreement with Technoline.
Yet we managed to get in touch with Ivan Vassallo himself, where we asked him – amongst other things – how he managed to obtain the money to buy out Technoline.
This is how it went…
Massachusetts-based Steward Health Care is set to buy out Vitals
Lovin Malta: Will Technoline’s deal with Vitals continue under Steward?
Ivan Vassallo: Isn’t it a bit presumptuous of you to ask this question? This is a private deal…
LM: Have you spoken to Steward at all about this deal?
IV: You would note that commercially sensitive contracts aren’t for public disclosure.
LM: Thats debatable….When you acquired Technoline, you had already been working there for a few years, right?
IV: Yes
LM: What made you decide to buy it out?
IV: One of the shareholders had become of an age where he wanted to exit.
LM: What about the other shareholder?
IV: The other shareholder…basically both offers were made (inaudible), but again this is a commercial relationship.
LM: It must have been quite expensive. Technoline’s quite a large company…
IV: I won’t disclose any financial details.
LM: At least €3 million…
IV: No comment
LM: More or less than €3 million?
IV: I said no comment.
Above is a screenshot of Ivan Vassallo talking to The Times of Malta in 2015
LM: My estimates say it was in the millions…how did you get the money to buy out Technoline?
IV: Again, that’s nobody’s business.
LM: One of the reasons I’m asking is because some medical suppliers (at least two) have received an anonymous letter written by someone purporting to be one of your employees. The letter basically says that this whole deal between Technoline and Vitals is wrong and distorting the market, and that you’re being financed by Mr Pierre Sladden *. How do you comment on that?
IV: *laughs* No comment
LM: What’s your relationship with Pierre Sladden?
IV: *in between laughter* Pierre Sladden is a longtime friend of mine, but I can assure you that he’s not financing anything.
LM: I don’t know what you find so funny, this is a letter that was sent by someone who says they work for you….
IV: But I know Pierre Sladden…
LM: Is Technoline being financed by Keith Schembri?
IV: *hysterical laughter* Nah….listen, feel free to entertain your audience, but come on…
LM: It’s a legitimate question, Mr Vassallo. What’s your relationship like with Keith Schembri?
IV: I have no relationship with Keith Schembri.
LM: Have you ever spoken to him?
IV: No
LM: What about John Dalli? **
IV: John Dalli? No…
Contractor Pierre Sladden
LM: Did you get the money from working at Technoline or did someone else help you out? It’s quite an impressive deal for you…
IV: Let’s say I had a good salary and I’m very good at managing my finances. And let’s say that you can go to a bank and they’ll draw up a business plan for you.
LM: Did you get a loan from a bank then?
IV: I said I could have got a loan, I didn’t say I got one.
LM: Did you?
IV: You mentioned Pierre Sladden, Keith Schembri and John Dalli, but there’s also Bank of Valletta…
LM: Did you get a loan from Bank of Valletta?
IV: I think that’s a very personal question so I wont answer that.
LM: You either got a loan, or you saved it up, or someone else gave it to you. How did you get the money?
IV: That is entirely my business.
LM: Not exactly, because we’re talking here about a very important contract between Technoline and Vitals, which grants Technoline exclusivity on the procurement of medical supplies.
IV: It doesn’t grant exclusivity, no.
LM: Vitals said the deal gives you exclusive rights.
IV: No, there’s no exclusive rights.LM: What is the deal then?
IV: Technline is the supply chain management company for VGH.
LM: Are you also employed by Vitals?
IV: No, I’m not.
LM: You have a Vitals business card with a Vitals email, and you’re listed as their head of supply management…
IV: That doesn’t mean I’m employed by Vitals, that’s my role within Vitals.
LM: Your competitors in the medical supply industry have raised concerns about having to go to you, essentially a competitor, if they want to sell to Vitals. Does this make sense?
Technoline’s Gzira offices
IV: My competitors will be able to tell you that they are fully involved and are partnered in our discussions, and any potential manufacturer might be selling anything to VGH
LM: Ultimately, this means that your competitors have to bid to you, which means you can see their bids and then make your own decisions accordingly. Some of your competitors have already complained about this, so it’s not true that everything is rosy and that they’re all fine with it.
IV: Yes, yes of course and I’ll say another thing…a private company can do business in that way.
LM: It can do business in that way because it was given the contract though, so obviously it can…it wasn’t illegal.
IV: The contract was awarded…
LM: Was there a tender?
IV: I’m not at liberty to say, but it was awarded.
LM: It was awarded to you. Did you have a relationship with Vitals beforehand? Anyone else could have been given that contract but that’s a bit of a silly argument because if it was someone else I’d be speaking to them right now. Is it true that Technoline sold a blood counter to the Gozo General Hospital despite the blood counter there being only three years old? ***
IV: I’m not at liberty to say what we sold and what we haven’t sold…
LM: The Gozo hospital isn’t a public hospital but it offers a public service…did you buy this blood counter from Siemens?
IV: I’m not at a liberty to discuss private business matters with you or with anyone who isn’t an involved partner.
LM: So what you’re saying is that the public don’t have a right to know about the transactions that go on which lead up to the purchase of medical equipment for these hospitals then?
IV: I think you should speak to Vitals, if they will be willing to divulge their purchases or transactions, then so be it.
LM: How can the public have our minds assured that we are getting a fair price for the medical equipment for these hospitals?
IV: I’m not at liberty to divulge the details of any transactions…
LM: Did we need the blood counter and was a public tender offered?
IV: I think you’ll have to ask Vitals.
LM: Basically Vitals asked you for a blood counter and you complied?
IV: I think you need to ask Vitals.
LM: OK, who is Yaser Ali Badar? ****
IV: Excuse me?
LM: Yaser Ali Bader..
IV: Why don’t you ask him?
LM: I’m asking you because he’s listed as the legal and judicial representative of your company, and he’s a Pakistani. Is there any connection between him and the Pakistanis involved in the running of Vitals?
IV: I’m not aware of any connections.
LM: How did you get to know him?
IV: We’ve been friends for about two years.
LM: Does he live in Malta?
IV: He now lives in Malta, yes.
LM: No connection between him and the people who own Vitals?
IV: I don’t think so, no.
LM: Have you spoken to him about whether he has any connections with them?
IV: No, I’ve never asked him.
LM: What’s the involvement of DF Advocates with your company?
IV: We use them, just as we use other law firms.
LM: They’re the same law firm as the one used by Vitals…
IV: They could very well be…
LM: They are…and the same lawyers of Sadeen (owners of The American University of Malta) too.
IV: And so?
LM: Why did you choose them?
IV: Why did I choose any of the other law firms?
LM: Just to reconfirm…you said you have never spoken to Schembri or Dalli
IV: Not that I know of.
LM: Have you spoken to Steward?
IV: Thats not your business…as far as I know, Technoline and Steward are private companies.
LM: Is it true your employee count increased by 50% this year?
IV: I don’t know where you’re getting your numbers and information from. You’re being fed a few red herrings.
LM: How many employees do you have?
IV: You could check that with ETC.
LM: Thank you very much, Mr Vassallo. Goodbye..
IV: No problem. Goodbye.
__________________________
Lovin Malta later called up Vassallo again to ask about a company he had set up in 2015, which is now in dissolution, and which lists auditor Brian Tonna’s BT International as one of its shareholders. Vassallo said he had set up the company to conduct work in gene technology but it never took off. He said Brian Tonna, whose audit firm Nexia BT had infamously set up the three Maltese-owned companies in the Panama Papers, had nothing to do with the company personally.
Steward Health Care president Armin Ernst – until recently employed with Vitals
* Pierre Sladden is a contractor who was named in the Panama Papers as having jointly owned a BVI company along with the Prime Minister’s chief of staff Keith Schembri and former Allied Group managing director Adrian Hillman. The revelation prompted the Tax Compliance Unit to investigate Sladden for potential tax evasion.
** Prime Minister Joseph Muscat appointed European Commissioner John Dalli as his health consultant shortly after winning the 2013 election. Dalli denies that his consultancy role had anything to do with the Vitals deal, but journalist Daphne Caruana Galizia had reported that Dalli had flown to Dubai to explain to the subcontractors behind Vitals how to win the government’s upcoming hospital privatisation bid. The Shift News recently revealed that the Vitals investors had signed a memorandum of understanding for the Maltese hospital privatisation deal five months before the government issued a public call for tenders.
*** Lovin Malta heard this information from a reliable source within the medical industry.
**** MFSA documents list a certain Yaser Ali Badar as one of the two directors (along with Ivan Vassallo) of Technoline. He is also listed as Technoline’s judicial and legal representative.
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