PPE company linked to ex-Tory peer Michelle Mone goes into liquidation | Michelle Mone
The company linked to former Conservative colleague Michelle Mone, who owed the government nearly £150 million over the supply of unusable personal protective equipment during the pandemic, has been liquidated.
The Department of Health and Social Care (DHSC) applied for the liquidation of PPE Medpro at a high court hearing on Thursday, arguing the company was “hopelessly insolvent” and should not continue into administration.
Mone’s husband, Isle of Man-based businessman Doug Barrowman, owned PPE Medpro, which received two contracts to supply PPE worth £203 million in May 2020 after Mone approached then-Cabinet Minister Michael Gove. The contracts were processed through the “VIP line” operated by Boris Johnson’s Conservative government during the pandemic, which gives high priority to people with political connections. Mone was appointed as a Conservative member of the House of Lords by David Cameron in 2015.
In October DHSC won a high court ruling that found that 25 million PPE of Medpro supplied under the second contract, for which it was paid £122 million, had not been certified as properly sterile. On 30 September, the day before the decision was made public, the company was placed into administration by a private trust company affiliated with Barrowman, registered in the Isle of Man.
DHSC said it now owes £148 million, including interest and costs. According to documents lodged at the high court, HMRC made a claim for £39 million in unpaid tax; £31 million of this is corporation tax.
DHSC last month opposed proposals made by administrators to run the company and recover the money, and instead applied for PPE Medpro to be wound up.
In their proposal, administrators did not detail where PPE Medpro’s money from government contracts went, but said: “A review of the company’s bank statements shows a small number of entities receiving the vast majority of funds from the company’s bank accounts.”
At Thursday’s insolvency and companies court hearing, Simon Passfield KC, on behalf of the administrators, said there were “potential” legal claims that could be brought against unnamed “third parties” on behalf of the company and “could result in a significant recovery” of the money, but gave no further details.
DHSC’s David Mohyuddin KC said in a written submission that PPE Medpro should be liquidated, saying the company was “clearly and very significantly insolvent”.
Mone and Barrowman have denied involvement in PPE Medpro for years, through their lawyers, in response to questions from the Guardian and in response to reports to the contrary. In November 2022, the Guardian revealed that Barrowman was paid at least £65 million from PPE Medpro’s profits, then transferred £29 million to an offshore trust set up to benefit Mone and his three adult children.
After a political backlash, Mone received permission from the Lords. Following criticism from Conservative leader Kemi Badenoch following the court ruling in October, Mone said he did not want to return to the Lords as a Conservative peer.
In December 2023, Mone admitted the couple had lied to the media in an interview with the BBC, and the couple confirmed their interest in the company. Barrowman admitted that he was paid around £60 million and transferred the money to the trust; The couple said their children were also beneficiaries.
After the company missed an October 15 deadline to repay money owed due to a high court ruling, health secretary Wes Streeting said: “We will pursue PPE Medpro with everything we can to return these funds to the NHS where they belong.”
With the company currently in liquidation, the government still faces serious legal hurdles if it wants to get the money back.
Streeting said in a statement: “We said we wouldn’t rest until PPE clawed back the taxpayers’ hard-earned money we paid to rogue operators like Medpro, and today we’ve taken further action to do just that.
“During the pandemic, when the entire country was making great sacrifices apart from their families and loved ones, Medpro supplied defective PPE and made unfair profits.
“We will continue to pursue PPE Medpro with everything we have to get these funds back to the NHS where they belong.”
