Nick Kochan
The details of an extraordinary deal for the sale of ventilators to Hungary have been revealed to journalists in Malaysia and Hungary.
Under pressure of pandemic, the Malaysian businessman Vinod Sekhar sold at least 800 ventilators to the Government of Hungary for a figure close to $60m. It has been alleged that this is some ten times greater per item than the prevailing market price.
READ MORE HERE: British doctors warn some Chinese ventilators could kill if used in hospitals
The following are the particulars of the contract. It is dated March 2020. So right at the start of the pandemic, when countries were under huge pressure to raise their stockpiles of equipment, among which were ventilators. These were in particularly short supply.
AGREEMENT FOR PURCHASE OF VENTILATORS 27 MARCH 2020
AGREEMENT FOR PURCHASE OF PCR TESTING KITS 27 MARCH 2020
AGREEMENT FOR PURCHASE OF VENTILATORS 26 MARCH 2020
AGREEMENT FOR PURCHASE OF VENTILATORS 25 MARCH 2020
AGREEMENT FOR PUCRHASS OF FACE MASKS 23 MARCH 2020
The parties to the contract are GR Technologies of Kuala Lumpur Malaysia, Datuk Vinod Sekhar and the Ministry of Foreign Affairs and Trade, Federal Republic of Hungary, based in Budapest, Hungary. Sekhar is described as the seller.
It is understood that the ventilators were supplied from China (with whom Hungary has formed a bridge to supply many forms of medical supplies to fight the pandemic).
Vinod Sekhar is a close ally of Anwar Ibrahim, a Malaysian opposition leader, and funds media sympathetic to Ibrahim. Vinod Sekhar was declared a bankrupt by the Malaysian High Court in 2005 but cleared of his bankruptcy status last year.
READ MORE HERE: Entire UK order of 250 Chinese ventilators ditched over danger to lives
The first clause of the contract describes the ventilator as an ‘invasive medical ventilator device’ which will cost $73,500 per unit. The contract specifies a purchase number of 800. On this basis the cost of a single ventilator is $91.875. The total price given for 800 is given $58.8 million. Insurance and freight costs add a further $1,800,000.
Germany purchased almost twice as much equipment from China as Hungary (1014.3 tons) for less than a tenth of the Hungarian price (30.7 million euros), according to an article published on 27 August 2020, on the Hungarian website Direkt36.
The total weight of equipment purchased by the Netherlands was also larger (582.3 tons), but the country paid less than one-thirtieth of the Hungarian price (€13.7 million). Italy imported almost the same weight of equipment (551.8 tons) as Hungary but paid less than a tenth of the Hungarian price.
The contract gives the buyer a generous 2% discount of $1.8m. This makes the total cost to the Government of Hungary $58 million.
MP Ágnes Vadai
The widely differing price range for ventilators bought by Hungary has been noted by Vadai Agnes, an MP from the Hungarian Democratic Coalition Party. She stated that, the Ministry of Foreign Affairs and Trade had bought one ventilator unit for an average price of $67,000 while the National Healthcare Service Centre had bought one unit for an average price of $36,000.
Clause 1.2 of the contract looks forward to an additional contract for the supply of 5,200 ‘sets of equivalent ventilators’. In the new contract, ‘the detailed terms of payment and delivery schedule of the remaining 5,200 sets will be finalised.’ No further details of a second or further contracts are given in this contract.
The total cost of 6000 ventilators at an individual cost of £91,875 is $55,125,000. This figure does not include any discount (that is the 2% offered on the first instalment). Press comment has pointed to a figure of $0.5 billion for all 6000 ventilators.
The third clause of the contract specifies the requirement for an advance payment of 100% of the total CIF value. CIF refers to “Cost, Insurance, and Freight” (CIF) which means that the Seller is responsible for delivery of the goods to a ship, loading the goods onto the ship, and insuring the shipment until it reaches the port of destination. This advance payment of $58m is due before 11pm (Budapest time) on 27 March 2020.
READ MORE HERE
Malaysian businessman gets lion’s share of multibillion-dollar Hungary deal
Malaysia Now
A Malaysian businessman with close ties to local politicians has secured a giant portion of multibillion-dollar contracts from the government of Hungary for the supply of medical equipment, MalaysiaNow has learnt.
Vinod Sekhar, who operates a chain of companies and organisations under the Petra Group, has secured some RM2.5 billion worth of contracts to supply ventilators to the Hungarian government, among dozens of purchases amounting to billions of dollars by the east European country at the early stage of the Covid-19 crisis.
In one of many documents sighted by MalaysiaNow, Vinod was named as the representative for GR Technologies Sdn Bhd, a company with an address in Bangsar, Kuala Lumpur.
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