Tory peer Michelle Mone secretly involved in PPE firm she referred to government

Leaked files appear to suggest the Conservative peer Michelle Mone and her husband, Douglas Barrowman, were secretly involved in a PPE business that was awarded more than £200m in government contracts after she referred it to the Cabinet Office.

Barrowman, an Isle of Man-based financier, may have played a central role in the business deal that enabled PPE Medpro to sell millions of masks and surgical gowns to the government at the start of the pandemic, documents suggest.

One person closely involved in PPE Medpro claimed Barrowman was “part of the financial consortium that backed” the company and was even involved in initial conversations with the Department of Health and Social Care (DHSC).

Documents seen by the Guardian suggest he and Lady Mone were kept informed of specific commercial arrangements about PPE Medpro’s supplies. And Mone appears to have sent messages to an individual in PPE Medpro’s supply chain about the contract to supply gowns.

The couple’s apparent involvement in the business activities of PPE Medpro, which was fast-tracked through the government’s “VIP lane” after Mone’s referral, will reignite controversy over Tory-linked firms profiting from government contracts during the pandemic. It will also raise questions about repeated attempts by Mone and Barrowman to distance themselves from PPE Medpro.

The identities of the people behind PPE Medpro, which was awarded contracts by the government in May and June 2020, has been an enduring mystery ever since and the subject of considerable speculation.

Citing confidentiality obligations, PPE Medpro, which was set up weeks before securing the lucrative government contracts, has always refused to identify what it described as the “consortium of successful entrepreneurs that comprise, have financed and backed” the company.

It was not until November 2021 – 18 months after PPE Medpro won its first contract – that a Freedom of Information Act request revealed that Mone had referred the company to the Cabinet Office, leading to it being processed through the high-priority VIP lane for politically connected companies.

Lawyers for Mone, who ran a lingerie company before David Cameron made her a member of the House of Lords, have always said she “was not connected to PPE Medpro in any capacity”. They also said she had no “association” with PPE Medpro, and “never had any role or function in PPE Medpro, nor in the process by which contracts were awarded” to the company.

Once it had become public that she had recommended PPE Medpro to the Cabinet Office, Mone’s lawyers said that after the referral – which they described as a “very simple, solitary and brief step” – she “did not do anything further in respect of PPE Medpro”.

Contacted about the Guardian’s new findings, Mone’s lawyers said its reporting was “grounded entirely on supposition and speculation and not based on accuracy” and declined to provide direct responses to a series of detailed questions. “You also appear to misunderstand our client’s responsibilities to you,” they said. “She is under no obligation to say anything to you.”

Barrowman’s lawyers have also repeatedly distanced him from the company, saying he “never had any role or function in PPE Medpro” and stating that he was not an investor, director or shareholder of the company. In a statement issued in December 2020, PPE Medpro said: “Mr Barrowman was not personally involved in working for PPEM in relation to PPE contracts.”

Major player

However, multiple sources and leaked files seen by the Guardian shed new light on PPE Medpro, its supply chain, and the commercial deal that enabled the newly created company to become a major player in the supply of personal protective equipment amid frantic global competition for supplies.

The UK-registered PPE Medpro Ltd, which was incorporated on 12 May 2020, was in effect a subsidiary of another company that had been created in the Isle of Man the previous day, using the same name.

A director of both the Isle of Man and UK versions of PPE Medpro was Anthony Page. A longtime employee in Barrowman’s Isle of Man-based financial services firm, the Knox Group, Page also runs Barrowman’s family office.

During the same week that PPE Medpro was formed, it entered into a crucial business deal with the London-based importing company Loudwater Trade and Finance Ltd, which committed to source gowns and masks from factories in China.

The contracts were signed by Page, the authorised signatory for PPE Medpro. However, documents seen by the Guardian appear to show Barrowman was personally involved in setting up PPE Medpro’s deal with Loudwater’s director, Maurice Stimler, as well as related business matters.

Documents apparently setting out the terms of the three-year agreement show the companies agreed to divide profits equally with clearly demarcated responsibilities. Loudwater would “manage and secure the supply chain of key PPE items from China” and take responsibility for the import and delivery of the products.

PPE Medpro’s role was to use its contacts to win business from the UK government. One document states the Isle of Man company would use its “extensive network to seek to secure rolling forward order contracts with the NHS and other government bodies within the British Isles”.

The apparent agreements between the two companies were concluded on 11 May 2020, the leaked materials suggest. It is not known exactly when Mone referred PPE Medpro to the office of Theodore Agnew, a fellow Conservative peer and Cabinet Office minister closely involved in procurement for the NHS.

Her referral is understood to have occurred around that time. Lord Agnew then referred PPE Medpro to the VIP lane, a fast-track process set up by DHSC procurement teams for offers to supply PPE from companies referred by ministers, MPs, NHS officials or other people with political connections.

Under emergency rules introduced at that time, the government had abandoned the competitive tender procedures usually used for procurement. Analysis would later show that companies that entered the VIP lane were 10 times more likely to secure contracts with the UK government.

Less than three weeks after entering into business with Loudwater, PPE Medpro secured an £80.85m government contract to supply 210m face masks. The following month, in June 2020, it won the second government contract worth £122m to supply 25m gowns.

It is not known what, if anything, Mone told Agnew’s office about whether she or her husband were involved in PPE Medpro. However, files seen by the Guardian appear to show her involvement in PPE Medpro’s business affairs in June 2020, after the company had been awarded its first contract with the DHSC and during the period it was seeking to secure the second.

Documents from that time appear to show both Mone and Barrowman included in correspondence between PPE Medpro’s suppliers about the cost price of gowns.

WhatApp messages believed to have been sent by Mone around the same time appear to show her discussing the required sizes of the gowns, and details regarding the DHSC’s purchase order or “PO” process.

In an exchange understood to have taken place days before PPE Medpro was awarded its second contract on 25 June 2020, a person in the supply chain appears to ask “Lady Michelle” for a conversation about the required sizes for the gowns.

The reply apparently sent by Mone states: “We are just about to take off in the jet. The sizes are in the order. We are waiting for the official PO, this should come in today.” Moments later, she appears to add: “They tell you not to start until you have this PO.”

Asked about the messages, Mone’s lawyers said she could not be expected to comment on “unknown and unattributable WhatsApp messages allegedly sent 19 months ago”. They added: “We have no idea – and neither does our client – of the content of the WhatsApp messages to which you refer, the recipients, the context and perhaps most important the provenance of them.”

Profits

PPE Medpro’s contracts with the government resulted in profits for a string of other businesses that became involved in its newly established global supply chain. They included Loudwater, additional intermediaries who received substantial payments to offshore companies, and the Hong Kong-based trading company Eric Beare, which was the original source of the Chinese-produced PPE.

The Guardian understands that PPE Medpro may have made in excess of £40m gross profits from its DHSC contracts. The company declined to say whether that figure was accurate. Responding to questions on behalf of PPE Medpro, Page accused the Guardian of pursuing an “improper witch-hunt” against the company based on “information that is wrong”.

He would not comment on whether the company was seeking further contracts with the UK government’s test-and-trace programme as recently as February 2021, as was suggested in a recent report in the Financial Times.

It quoted a leaked civil servant email, dated 10 February 2021, that appeared to suggest Mone was lobbying government officials on behalf of PPE Medpro.

In the email, Jacqui Rock, chief commercial officer for the government’s test-and-trace programme, reportedly told colleagues: “We do have an issue here. Baroness Mone is going to Michael Gove and Matt Hancock today as she is incandescent with rage on the way she believes Medpro have been treating [sic] in the matter.”

Mone’s lawyers declined to be drawn on why a civil servant may have perceived her to be “incandescent with rage” over the treatment of PPE Medpro as recently as February 2021. The lawyers said the “material quoted” from the leaked email was inaccurate, but provided no further explanation.

Lawyers for Barrowman said the Guardian’s reporting amounted to “clutching at straws” and was “largely incorrect”. They added: “Our client’s desire not to reveal private or confidential information should not be taken as an assumption that any of your assertions or conclusions are correct or unchallenged.”

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