Will UK taxpayers get £122m worth of Medpro PPE? | Michelle Moon

Unraveling of Britain’s most high-profile five-year Covid contracts scandal involving a baroness, her husband and multi-million pound government deals accelerated last week with a Supreme Court ruling against the company linked to her former Conservative peer Michelle Moon.

The judge, Ms Justice Cockerill, ruled that Medpro Personal Protective Equipment, owned by Moon’s husband, Isle of Man-based businessman Doug Barrowman, had supplied faulty personal protective equipment (PPE) for use in the NHS during the pandemic. Cockerill ordered that PPE Medpro refund the £122 million the Department of Health and Social Care paid for an order for 25 million sterile surgical gowns, under a contract awarded in June 2020 via VIP Pass.

Councilor Rachel Reeves praised the ruling as a vindication of the Labor government Declared intention To recover some of the billions of pounds of public money wasted by Boris Johnson’s administration during the Covid crisis.

“We want our money back. We’re getting our money back.” Reeves posted on X. “And it will go where it belongs – in our schools, the NHS and our communities.”

The June contract, and another worth £80.85 million to supply face masks, which were also paid for by the DHSC, were awarded to PPE Medpro after Mone approached then Cabinet Office minister Michael Gove in May 2020. Its bid was processed through “VIP Lane”, the system run by Johnson’s government, with priority given to people with political connections such as Mone, and treat them as more credible than experienced PPE suppliers. For years afterward, Moon and Barrowman through their former lawyers denied involvement in PPE Medpro, until late 2023 they admitted their roles and Moon admitted they had lied.

The gowns were rejected upon inspection in September 2020 at NHS storage facilities in Daventry, Northamptonshire, because their labels were invalid, and also indicated they had not been certified as sterile, a requirement to protect life. Cockerill was ordered to pay the £122 million by October 15.

However, in this clear-cut story of British justice finally recovering millions paid by taxpayers for unsafe medical supplies, there is a looming snag. The ruling is not against Barrowman personally, but against his company, which has very little money or assets left. In fact, on September 30, the day before Cockerill issued her ruling, PPE Medpro Ltd has been placed in bankruptcy And appoint administrators.

So, although the company has until Wednesday to repay the £122m, there does not appear to be a realistic prospect of it being able to do so. In a series of public statements since the ruling, Moon accused Reeves of using inflammatory language after the chancellor jokingly asserted that the government had a “vendetta” against the couple, and Barrowman repeatedly said the ruling was wrong, a “whitewash.” [sic] Neither gave any indication that they intended to finance the repayment, until a new statement was issued on Friday evening when their spokesman said for the first time that the PPE Medpro “consortium” was prepared to discuss “a possible settlement with the government”.

In November 2022, The Guardian revealed that Barrowman took at least £65m of PPE Medpro profits, then transferred £29m into a trust set up for Moon and her three adult children. Barrowman’s children were also beneficiaries of the trust, the couple said in a BBC interview in December 2023.

In a statement issued on October 4, Barrowman’s spokesperson criticized PPE Medpro’s supply chain companies, saying the official could file legal claims against them. It is difficult to see the basis for this, given that PPE Medpro accepted the gowns five years ago and has always argued that it complied with the DHSC contract. Barrowman describes PPE Medpro and its supply chain companies as a consortium.

A Barrowman spokesman confirmed PPE Medpro’s profits, saying that of the £203m from DHSC, the company paid £137m to supply chain companies to source and purchase PPE, leaving a profit of £66m for Barrowman. Of this, according to the spokesperson’s figures, PPE Medpro made a profit of £39m from the contract for gowns that were never used.

However, although Barrowman has made a lot of PPE Medpro deals, and the pair have over the years owned luxury yachts, a private jet and prestigious properties in various locations, there is no clear path for the government to recover even a penny after the ruling.

The Guardian asked the couple’s spokesman this week If Barrowman intends to provide £122 million so that PPE Medpro can repay DHSC. The spokesman replied: “We cannot comment on any matters directly relating to PPE Medpro Ltd. This is not an attempt to avoid your questions. PPE Medpro is now in administration and only officials are able to comment on the company. It is necessary to make clear, to avoid any misunderstanding, that the court case and subsequent ruling were against PPE Medpro, not Mr Barrowman.”

The Guardian asked a spokesperson to clarify whether this meant Barrowman and Mone did not intend to fund the return of the £122m, or repay any of the money received from PPE Medpro profits. The spokesman replied: “That is not what my statement said at all and it is a huge and incorrect leap for you to come to that conclusion. Let me be clear: “At no stage did we state that Mr Barrowman had any intention of paying any money to DHSC. We have made it clear that we cannot answer any questions regarding Medpro PPE.”

The spokesperson added: “Furthermore, you included Baroness Moon – why? She received no money from the DHSC contract. Her involvement as a presenter to the DHSC was fully disclosed…so reaching out to her and suggesting she should repay the money simply because she is married to Mr Barrowman is unfair, deceptive and shows you have a personal/public agenda against her.”

In the new statement sent on Friday evening, a Barrowman spokesman said: “PPE Medpro consortium partners are prepared to enter into dialogue with the company’s directors to discuss a potential settlement with the government.”

PPE Medpro is now bankrupt – and was placed into administration by Perree Ptc, a private trust linked to Barrowman registered in the tax haven of the British Virgin Islands, which had mortgage-style charges against the company. A Barrowman spokesman did not respond to questions about Perry, or the circumstances under which the company was placed into administration.

The entire legal basis of limited companies is to protect the people who have invested their money from becoming personally liable for all of its debts: giving the owners limited liability. If Barrowman, who described himself in a 2023 BBC interview as the ultimate beneficial owner of PPE Medpro, who received a £65m profit, does not want to pay the DHSC, legal routes to enforce the ruling appear difficult.

There are only narrow circumstances in which a director or someone who owes money, in this case the government, can assume the limited liability of a corporation—“piercing the corporate veil” in legal jargon—and force payment on directors or shareholders.

“There is no clear and easy route to recovering money from any individuals behind the company in this case,” says Simon Walsh, commercial litigation partner at SA lawHe said. “Circumstances for piercing the corporate veil could include cases where an official proves that transactions were improper or fraudulent. This may not apply here and investigating them would inevitably be expensive, complex and time-consuming. There is a real risk of a pyrrhic victory for the government in this case.”

Any process to seek repayment of the £122 million appears to be separate from the National Crime Agency’s long-running investigation into Medpro personal protective equipment and whether Mone and Barrowman committed criminal offences, including fraud by false representation, in the procurement of the contracts. The couple denies any criminal wrongdoing.

The NCA confirmed it began its investigation in May 2021, and in April the following year, law enforcement officers raided the couple’s mansion on the Isle of Man and their home in London, as well as the offices of PPE Medpro. In December 2023, Moon and Barrowman agreed to an order freezing assets worth more than £75 million, including bank accounts, wealth management accounts and shares held in companies that own luxury properties, following a request from the Crown Prosecution Service under the Proceeds of Crime Act.

The NCA has not provided any detailed information about how long it will take or when CPS may decide whether to press any criminal charges. PPE Medpro’s lawyer, Charles Samek KC, complained during the High Court trial that the NCA’s investigation was “long-running and seemingly never-ending”, and “hanging… like a sword of Damocles” over the company “without any progress appearing to have been made”.

In response to questions about how long the investigations took, the National Crime Agency said in a statement: “Investigations must follow all reasonable lines of inquiry. In investigations into serious economic crimes, these lines of inquiry can be incredibly complex. It may take a long time to ensure a comprehensive, independent and objective investigation is carried out.”

Reeves insisted the government was determined to recover money lost in botched pandemic spending, pointing to the creation of the International Monetary Fund Covid Anti-Fraud Commissioner Among other initiatives. However, in the PPE Medpro case, it risks spending millions more for an expert legal team led by Paul Stanley KC to win a hard-fought £122 million judgment that it cannot enforce. Government sources did not provide any information about what it would do if the money was not paid on Wednesday.

The Department of Health and Human Services declined to expand on the comments of Health Secretary Wes Streeting, who said on the day of the ruling: “PPE Medpro must now repay the government and taxpayers £122 million. My department will work closely with the directors of PPE Medpro Limited to recover everything we can.”

Daniel Bruce, CEO of Transparency International UK, is a key member of Transparency International British Anti-Corruption Alliance “There appear to be very few tools available to the government to recover anything close to the £122 million that the High Court has ordered Medpro to pay for PPE. The whole case represents another indictment of the ‘VIP pass’ and faulty and wasteful purchases of PPE during the pandemic,” said, who was a key participant in the Covid public inquiry into the pandemic contracting debacle.

This saga of her Conservative counterpart, her businessman husband, Johnson’s Conservative government and multi-million pound Covid contracts still has some way to go.