Documents leaked to the Independent show that Worthing District Health Authority awarded the contract to Westminster Health Care in spite of a lower bid from a local NHS trust which is already managing homes in the area.
Westminster Health Care, which manages 4,000 nursing home beds in the UK, was floated last year. Until then, it was a wholly-owned subsidiary of a large US commercial hospital concern called National Medical Enterprises.
NME now owns 40 per cent.
In June 1992, NME paid more than pounds 670,000 in an out- of-court settlement following allegations of hospital fraud by the state of Texas.
Earlier this year, the company admitted responsibility for the death of a 13-year-old girl in one of its hospitals. The company has faced about 150 allegations of patient abuse and misconduct since the early 1980s, and has paid about pounds 250m in fines for fraud.
A spokeswoman for NME said the company had sold the hospitals involved and there was no suggestion of any current malpractice.
A Westminster Health Care spokeswoman said yesterday: 'NME have no involvement in the management of our day-to- day business.' She confirmed the UK company had three NME non-executive directors.
A spokeswoman for Worthing District Health Authority said: 'We are aware of the background to the company . . . I am satisfied that Westminster Health will deliver the quality of service.'
Dawn Primarolo, shadow health minister, said: 'There must be an independent investigation into whether Westminster Health Care is a suitable company.'Reuse content