The company linked to former Conservative counterpart Michelle Moon, which owes the government around £150m for supplying unusable personal protective equipment during the Covid-19 pandemic, has been placed into liquidation.
The Department of Health and Social Care (DHSC) applied to wind up PPE Medpro at a High Court hearing on Thursday, arguing that the company was “hopelessly insolvent” and should not continue in administration.
Moon’s husband, Isle of Man-based businessman Doug Barrowman, owned PPE Medpro, which was awarded two contracts worth £203m to supply PPE after Moon contacted Michael Gove, then Cabinet Office minister, in May 2020.
The contracts were processed via a “VIP route” run by Boris Johnson’s Conservative government during the pandemic which gave high priority to people with political connections. Moon was appointed to the House of Lords as a Conservative peer by David Cameron in 2015.
In October, DHSC won a High Court ruling that the 25m gowns supplied by Medpro under the second contract, for which it was paid £122m, were not certified as sterile, as required.
On September 30, the day before the ruling was announced, the company was placed into administration by a private trust company registered in the Isle of Man linked to Barrowman.
The DHSC said the amount it now owes is £148m, including interest and costs. HMRC has made a claim for £39m for unpaid tax, including £31m corporation tax, according to documents submitted to the High Court.
The DHSC opposed proposals made by officials last month to run the company and seek a refund, and instead applied to wind up PPE Medpro.
In their proposals, officials did not detail where PPE Medpro’s money from government contracts went, but said: “A review of the company’s bank statements reflects a small number of entities that received the vast majority of funds from the company’s bank accounts.”
At Thursday’s hearing at the Insolvency and Companies Court, Simon Passfield KC, on behalf of the directors, said there were “potential” legal claims that could be brought on behalf of the company against unnamed “third parties”, which “could result in the recovery of significant sums” of money, but he did not provide further details.
David Mohiuddin KC, on behalf of the DHSC, said in a written submission that PPE Medpro should be terminated, saying the company was “clearly and very substantially insolvent”.
Moon and Barrowman have denied for years, through their lawyers, that they were involved in Medpro PPE, despite questions from The Guardian and reporting otherwise.
In November 2022, The Guardian revealed that Barrowman took at least £65m of PPE Medpro profits, then transferred £29m to an offshore trust set up for Moon and her three adult children.
After political protests, Moon took leave from the Lords. Following criticism from Conservative leader Kemi Badenoch following the court ruling in October, Moon said she did not want to return to the Lords as a Conservative peer.
In December 2023, Moon admitted in an interview with the BBC that the couple lied to the media and confirmed their involvement in the company. Barrowman admitted he received nearly £60 million and transferred the money to the trust. His children were also beneficiaries, the couple said.
After the company missed an October 15 deadline to repay the money owed due to the High Court ruling, Health Secretary Wes Streeting said: “We will go after Medpro PPE with everything we have to put this money back where it belongs – in our NHS.”
With the company now liquidated, the government still faces significant legal hurdles in recovering the funds.
“We said we wouldn’t rest until we recovered the hard-earned taxpayer money paid to rogue operators like Medpro PPE, and today we’ve taken further action to do that,” Streeting said.
“During the pandemic, when the entire country was making great sacrifices, separated from family and loved ones, Medpro supplied defective PPE and unfairly benefited.
“We will continue to pursue Medpro PPE with everything we have to put this money back where it belongs – in our NHS.”