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The company linked to the former Conservative peer Michelle Mone, which owes the government almost £150m for supplying unusable personal protective equipment during the pandemic, has been put into liquidation.
The Department of Health and Social Care (DHSC) applied for PPE Medpro to be wound up at a high court hearing on Thursday, arguing that the company was “hopelessly insolvent” and should not continue in administration.
Mone’s husband, the Isle of Man-based businessman Doug Barrowman, owned PPE Medpro, which was awarded two contracts to supply PPE worth £203m after Mone approached Michael Gove, the then Cabinet Office minister, in May 2020. The contracts were processed via the “VIP lane” operated by Boris Johnson’s Conservative government during the pandemic that gave high priority to people with political connections. Mone was appointed a Conservative member of the House of Lords by David Cameron in 2015.
In October, the DHSC won a high court judgment that the 25m gowns PPE Medpro supplied under the second contract, for which it was paid £122m, were not certified to be sterile as required. On 30 September, the day before the judgment was made public, the company was put into administration by a private trust company registered in the Isle of Man linked to Barrowman.
The DHSC has said that with interest and costs, it is now owed £148m. HMRC has submitted a claim of £39m for unpaid tax, of which £31m is corporation tax, according to documents filed with the high court.
The DHSC opposed proposals set out by the administrators last month for managing the company and seeking to recover money, and instead applied for PPE Medpro to be wound up.
In its proposals, the administrators did not provide details about where PPE Medpro’s money from the government contracts had gone, but said: “A review of the company’s bank statements reflects a small number of entities that have received the vast majority of funds from the company’s bank accounts.”
At Thursday’s hearing in the insolvency and companies court, Simon Passfield KC, for the administrators, said there were “potential” legal claims that could be brought on behalf of the company against unnamed “third parties”, which “could result in substantial recoveries” of money, but provided no further details.
David Mohyuddin KC, for the DHSC, said in a written submission that PPE Medpro should be wound up, saying the company was “obviously and very significantly insolvent”.
Mone and Barrowman denied through their lawyers for years that they were involved in PPE Medpro in response to questions from the Guardian and reporting to the contrary. In November 2022, the Guardian revealed that Barrowman had been paid at least £65m from PPE Medpro’s profits, then transferred £29m to an offshore trust set up to benefit Mone and her three adult children.
After a political outcry, Mone took a leave of absence from the Lords. After criticism from the Conservative leader, Kemi Badenoch, after October’s court ruling, Mone said she had no wish to return to the Lords as a Conservative peer.
In December 2023, Mone admitted in a BBC interview that the couple had lied to the media, and the couple confirmed their involvement in the company. Barrowman acknowledged he had been paid approximately £60m and transferred money into the trust; the couple said his children were beneficiaries as well.
After the company missed a 15 October deadline to repay the money owed due to the high court judgment, the health secretary, Wes Streeting, said: “We will pursue PPE Medpro with everything we’ve got to get these funds back where they belong – in our NHS.”
With the company now in liquidation, the government still faces significant legal obstacles if it is to get back any money.
