In Hunt for Ventilators, Chinese Firm’s Denial Raises Questions
In Hunt for Ventilators, Chinese Firm’s Denial Raises Questions
(Bloomberg) -- Mexico’s desperate race to secure ventilators before coronavirus cases overwhelm the public health system is pushing it into unknown corners of the medical-supply market, with at least one contract raising questions over its legitimacy.
Chinese medical-device maker Beijing Aeonmed Co., which is said to be the supplier of an urgent order for 2,500 ventilators, said it has no knowledge of the contract or the firm acting as the middle man. Levanting Global Servicios LLC SA, a third-party distributor that won the contract with Mexico’s government to fulfill the orders, disputes that account. It said it’s already paid Aeonmed more than $5 million for the equipment, but perhaps the company can’t yet disclose the order.
In China, “they are checking every factory to see what they do with the ventilators, so that’s what’s happening with the delay of the company,” Baldemar Perez Rios, Levanting’s owner, said by phone from Texas. “Everything has been arranged, but because they aren’t authorized to speak now, at the moment that I have everything ready -- once we are shipping -- we’ll be able to talk about everything.”
The deal was flagged by non-profit watchdog Mexicans Against Corruption & Impunity, which questioned why the government would award a direct order to a distributor that’s not known for sourcing medical devices. Previously, Levanting has won contracts with energy companies including state oil producer Pemex and the Federal Electricity Commission.
“Public documents don’t specify the brand and model of the devices,” the group said on its website.
Rash of Misinformation
When contacted by Bloomberg, Aeonmed said it doesn’t have a deal with any parties to export 2,500 ventilators to Mexico. The Chinese firm previously warned on its website of a rash of misinformation regarding its equipment and shipments.
Mexico joins nations around the world in scrambling to secure ventilators, as the global death toll from the coronavirus tops 128,000 and fuels demand from Milan to New York. Hospitals, which usually have just a few of the machines, now face the need for one per critically ill patient. That shortfall is not easy to fill because the complex devices can’t be churned out as quickly as other medical supplies like surgical masks or disinfectant.
On April 8, China’s Ministry of Industry & Information Technology called for a “sober understanding” of China’s ventilator capacity. The ministry estimated China can only make about 2,200 invasive ventilators every week, less than a fifth of global capacity and said it’s “unrealistic” that China could satisfy international demand. As of then, the country has delivered almost 18,000 ventilators, including more than 4,000 invasive ones, to overseas countries.
Rios, Levanting’s owner, said Mexico has yet to make any payments for the equipment, and the government required a warranty bond so that any outlays could be recovered should the quality of the ventilators not meet expectations. The first batch of shipments is due this week, he said, and he’s aiming to fulfill the entire order within 30 days.
Zoe Robledo, the head of Mexico’s Social Security Institute, which is buying the ventilators, confirmed that the government hasn’t yet paid anything on the contract. The agency set Wednesday as a deadline to hear from the company or it threatened to cancel the deal.
But, he added, if Levanting delivers the promised ventilators and they pass all technical tests, then it may not matter whether the firm purchased the equipment directly or through another middle man, Robledo said.
“I wouldn’t have any option but to buy them, for one reason: This is a matter of life and death,” he said.
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