When Malta went on the FATF Grey List, foreign investors pulled out.
A healthcare business from the United States with investments worth millions of dollars has pulled out of Malta because of corruption in the government and unfair decisions made by the local courts.
Steward Health Care Management (SHCM) said that it has ended its concession agreement with the Maltese government because of a political court ruling. This is likely to stop foreign investors from putting money into the small European country.
This happened not long after the Financial Action Task Force (FATF) put Malta on the “grey list” because the country’s governance and regulations had major structural flaws.
SHCM said that it doesn’t think the business setting and investment climate in Malta are good for foreign companies to work with the government in a positive way.
SHCM’s local company, Steward Health Care Malta (SHCM), said it has told the Maltese government that it will end the Services Concession Agreement and related contractual framework because business agreements have been broken.
The St. Luke’s, Karin Grech, and Gozo General Hospitals, as well as the Barts Medical School, are all part of the grant.
“The company’s top priority is still the health and care of its patients and the well-being of its employees,” the company said. SHCM will make sure that the management of its operations changes in a smooth way and will work with the right people in a good faith way to make sure this is done in a fair amount of time.
“SHCM and its parent company, Steward Health Care International (SHCI), have always followed the highest professional standards and values, including a desire for good governance and transparency.”
Steward said it is disappointed that the government of Malta hasn’t stuck to the spirit of the public-private partnership deal during this whole project. It showed that the government didn’t take responsibility for its debts, which hadn’t been looked at. It also showed that the government didn’t keep its promises to renegotiate the “unbankable” and unsustainable terms of the concession, even though it had promised to do so three times and was still negotiating at the time of the verdict. As a result, Steward wasn’t able to get the money it needed to fully fulfill the terms of its contract.
Steward said, “In general, SHCI is worried about how bad the business situation is getting in Malta. The recent Civil Court ruling shows that the rule of law is getting worse, and foreign investors are not being supported or protected. This is reflected in the fact that Malta is now on the grey list of the Financial Action Task Force (FATF), which found serious structural problems in Malta’s governance and regulation that are not in line with SHCI’s own values.
“More recently, the government’s decision not to challenge the Civil Court’s decision that its own actions were corrupt is an admission of guilt about how it ran the country.
“SHCM says that it kept the US Embassy and State Department, which was present at the talks on the concession terms on more than one occasion, fully informed of all important events and meetings with the government of Malta. By leaving Malta, SHCI and its management will be able to put their attention and resources on places that are better for businesses and more in line with their high standards.
“SHCI will keep working to be a leader in an effective, patient-first approach that gives people all over the world access to high-quality, coordinated, and affordable care.”
SHCI recently sent an unusual but important complaint to the European Commission against the Maltese government and the country’s judiciary for breaking EU laws in several ways. This was done after a judge in a Maltese court decided without evidence that SHCI’s deal with the Maltese government to provide health services in three hospitals was a fraud. The company told the European Commission that it was clear that the decision was based on politics instead of facts.
Steward has strongly disagreed with the judge’s story of how he came to his conclusions. He has said that the judge’s story is not supported by proof and that it is speculative and highly conjectural.
After the appeal, Steward said, “The judgment’s story, which is based on speculation and guesswork, could have been disproven if SHCM had been asked to show proof on these points. Such a request was never made, so the right to defense was ignored.
“The decision about the hospitals’ compromise breaks EU law in several ways. It goes against the most important principle of free movement of capital, as well as the general principles of legal certainty, reasonable expectations, and proportionality. SHCI also thinks that the judge’s decision went way beyond what he was supposed to do on purpose.
Steward said that the ruling was a matter of politics. It said, “This is a serious violation of judicial rules and a clear sign that the verdict was made for political reasons rather than based on facts.” These mistakes, along with most of the others in the judgement, are very worrying for the rule of law in Malta, which has had major corruption scandals involving the executive, legislative, and judicial branches of government for many years. Some of these scandals have even led the European Banking Authority to investigate and ask for changes to be made.
Steward has warned that a verdict that was made because of politics is the latest sign that the rule of law in Malta is getting worse and will have major effects on the future of foreign investment in the country.
It said, “As shown by the ridiculously bad court decision and the coordinated actions of supposedly independent government agencies afterward, SHCI is very worried about the rule of law and the way the main parts of government work.” SHCI sent this complaint to the European Commission. They are also pursuing our case in Malta and have asked the European Court of Justice to review the preliminary decision.
“SHCI notes that Malta’s record of respecting the authority and legitimacy of European judicial authorities has been getting worse recently. This is because the European Public Prosecutor’s Office (EPPO) complained last month that it was being “shut out” of magisterial probes. SHCM is still committed to a fair and orderly transition, and it will continue to put the health and safety of its patients and workers first.