The Department of Health and Social Care awarded government contracts to PPE Medpro worth £122m for sterile surgical gowns and another totalling £80m for face masks

THE controversial PPE firm linked to Baroness Michelle Mone has today been wound-up after failing to pay the government nearly £150million – making it unlikely they will ever see most of the money.

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PPE Medpro was put into administration in September owing £148m to the Department of Health and Social Care after losing a High Court lawsuit over useless Covid gowns. That is on top of a further £39million the firm, which was put into administration on the eve of the damning court judgment, is said to owe to the taxman.

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During an hour-long hearing in courtroom six of the Insolvency and Companies Court inside the Rolls Building, in central London, Judge Sebastian Prentis said: “I remain of the firm view that the correct course is now to discharge the administrators and to compulsorily wind up the company.”

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He added: “The department’s debt is very large indeed and it is a debt that has been incurred through the supply of defective equipment at a time of national crisis. It is also apparent that there will be questions of how this debt may be recovered. The tracking through where this company’s money went because very little of it is left.

“[The government] is exceedingly keen that this company ought to be placed in the hands, initially at least, of the Official Receiver. It will then be for the Official Receiver to consider what investigations she is able to make.”

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Judge Prentis made the ruling after barristers acting for the Secretary of State for Health and Social Care requested an immediate winding-up order against the company. In a written submission, David Mohyuddin KC claimed there was “no realistic alternative” due to it being both “hopelessly insolvent” and “obviously and very significantly insolvent”.

The Secretary of State was described as the company’s largest creditor, accounting for almost 79% of its unsecured debts. The court heard PPE Medpro’s next most significant, and only other unconnected creditor, is HMRC, which has submitted a claim for £39,009,047.78.

Baroness Mone, who rose to prominence through lingerie firm Ultimo, has faced calls to be stripped of her OBE and her peerage.She was handed a peerage by the Tories in 2015, but has been on leave from the House of Lords since 2022. The Department of Health and Social Care awarded two government contracts to PPE Medpro, including one for £122m for sterile surgical gowns and another worth £80m for face masks, after Mone first approached Michael Gove, the then Cabinet Office minister, in May 2020.

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PPE Medpro was set up during the same month for the sole purpose of selling personal protective equipment to the UK government during the Covid-19 pandemic. The contracts were processed via the so-called Covid “VIP lane” operated by Boris Johnson’s Tory government during the pandemic, which gave high priority to people with political connections.

However, upon delivery of the PPE inspectors were not satisfied the gowns were sterile and in turn contractually compliant, leading to the government launching a court case against the firm. Barristers for the firm later claimed at trial it was “singled out for unfair treatment”, claiming the gowns became defective due to the conditions they were kept in after being delivered to DHSC.

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Mone, 53, initially claimed she had no link to PPE Medpro, but then admitted to the Mirror in 2023 she had lied. The peer and her husband Doug Barrowman, who live in the tax haven of the Isle of Man, reportedly benefitted from £65m in profits from the company.

The couple, and the company, are now subject to an investigation by the National Crime Agency. DHSC is owed £148,045,993 after PPE Medpro missed a deadline for repayment on the £122m High Court judgment.

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According to previously filed documents, another £207,000 is owed to Grosvenor Law, the company’s lawyers in the recent court battle with the DHSC, and £1m is owed to the Isle of Man entity linked to Barrowman that put the company into administration.

A preliminary statement by the administrators Forvis Mazars, filed at Companies House on October 30, put the total owed to the DHSC at £148m because the court judgment imposed interest on the £122m from late 2020 when the gowns were rejected. Further interest has since been accumulating at an annual rate of 8%, the DHSC has said.

Since 2023, PPE Medpro has had one director, Arthur Lancaster, who has claimed the company is owed £948,416 by HMRC. According to a statement of affairs filed earlier this year, it has just £951,134 left in assets.

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Simon Passfield KC, for PPE Medpro’s joint administrators, today said the company has one secured creditor, Angelo (PTC) Limited, which, according to Companies House, is registered in the Isle of Man. He said PPE Medpro had “sufficient property” to pay off a debt of around £1 million to Angelo, and that the administrators believed there would “also be a return to the unsecured creditors”, including the DHSC.

Mr Passfield continued that there were “potential” legal claims by the company against “third parties”, which, if successful, “could result in substantial recoveries” of funds, but no further details were given in court.

Speaking on Thursday night, Health and Social Care Secretary Wes Streeting said: “We said that we will not rest until we’ve got back hard-earned taxpayer money paid to rogue operators like PPE Medpro, and today we’ve taken further action to do just that.

“During the pandemic, when the whole country was making huge sacrifices, separated from family and loved ones, PPE Medpro supplied defective PPE and unfairly profited. We will keep going after PPE Medpro with everything we’ve got to get these funds back where they belong – in our NHS.”

Mr Barrowman and Baroness Mone have always vehemently denied any wrongdoing.