The one-time director of Vitals Global Healthcare, Ram Tumuluri, is alleging he was threatened by former OPM chief of staff Keith Schembri unless he sold the hospitals concession to Steward Health Care.

Times of Malta reports on Wednesday that Tumuluri is seeking whistleblower protection in the US to reveal alleged coercion, threats and corrupt practices by Joseph Muscat’s government in the hospitals contract.

Three public hospitals were passed on to the private sector, with a judgment given by Mr Justice Francesco Depasquale in February rescinding the deal which the court ruled as being "fraudulent".

In a 500-page filing in the US, Tumuluri alleges he was the victim of a plot by Muscat’s government to kick him out of Malta in favour of a pre-ordained deal with American operators Steward Health Care.

Tumuluri alleges that during a December 2017 meeting, two months after journalist Daphne Caruana Galizia had been killed, Schembri told him: “You know what happened with Daphne and you don’t want to end up in that position. You want us to be a friend, not a foe.”

Schembri has denied the claims, insisting they are completely false and baseless.

"It appears that he has a vivid imagination and is attempting to associate this case with the tragic murder of Mrs Caruana Galizia, which is absolutely horrendous," Schembri told Times of Malta. 

Schembri said it is essential to separate "fact from fiction" and refrain from spreading "sensationalised narratives" that only serve to mislead the public. 

Steward has also it "emphatically rejects any and all allegations of impropriety" made by Tumuluri, according to the newspaper. 

A spokesperson for the company said Steward considers Tumuluri's accusations as malicious, self-serving and entirely without merit. 

The new story follows earlier revelations that showed how Muscat received payments from a Swiss firm that was previously called VGH Europe for consultancy work. Muscat has denied any wrongdoing.

Tumuluri wants to turn whistleblower in a filing under the US Foreign Corrupt Practices Act (FCPA) to the Securities and Exchange Commission (SEC). 

Tumuluri’s FCPA filings were obtained by OCCRP and shared with Times of Malta and The Shift News. 

The hospitals concession was transferred to Steward Health Care in February 2018 with the American company buying Vitals’ shares.

Tumuluri is now claiming he only agreed to the deal because of “unlawful coercion” and “extortionate acts” by Steward and Muscat’s government.

Tumuluri blames VGH’s failure to fulfil its contractual obligations on the company’s then CEO Armin Ernst.

Tumuluri refers to meetings he is alleged to have had with Keith Schembri in which the former OPM chief of staff made several “unlawful demands”. The former VGH director also claimed he was threatened that unless he complied with the request to sell his shares to a “third party” (which later transpired to be Steward) he would be removed from the country.