PPE Medpro was hurt after the decision on a £148m Covid contract linked to Michelle Mone
PPE Medpro, a company linked to Baroness Michelle Mone, has been hurt after a court ruling made it unlikely the government will recover most of the £148 million it is owed for a failed pandemic PPE contract.
The Insolvency and Companies Court ordered the company to be closed on Thursday, a few months after it lost at the High Court in a lawsuit against the Department of Health and Social Care (DHSC) over the supply of 25 million surgical gowns during the Covid-19 crisis.
The decision follows PPE Medpro’s decision to apply for administration on 30 September – one day before the High Court ordered it to pay £148 million. The company was run by Doug Barrowman, Lady Mone’s husband, and was awarded government contracts during the violence.
In Thursday’s case, the lawyers representing the union officials stated that the company should continue to operate in order to pay other people who owe them. However, Insolvency and Corporate Court Judge Sebastian Prentis rejected that option and ordered the company to be wound up.
“I always have a strong opinion that the right way now is to release the management and close the company by force,” said the judge.
The court filing reveals that PPE Medpro’s liabilities extend beyond the DHSC decision. HM Revenue & Customs is also pursuing the company for £39 million in unpaid tax, while administrators have reported that only around £600,000 is available to meet the claims of unsecured creditors.
Simon Passfield KC, representing the joint administrators, told the court that PPE Medpro had one creditor, Angelo (PTC) Limited, registered in the Isle of Man. He said management believed there were sufficient assets in the business to repay the approximately £1 million owed to the debtor and suggested that unsecured creditors, including DHSC, could be repaid.
Passfield also told the court that there are potential legal claims against third parties, which if successful, could lead to “significant restitution”, although no further details were disclosed.
However, the DHSC has made it clear that it supports abolition. David Mohyuddin KC, acting head of the department, said there was nothing else that could be done given the financial situation of the company.
“The discretionary power of the court to make a restraining order against Medpro is clearly applicable: clearly and largely lacking,” he said.
Legal experts say this decision leaves the government facing the challenge of recovering taxpayers’ money. James Robertson, dispute resolution partner at Spector Constant & Williams, said recovery may depend on whether the government is willing to fund further legal action against the company’s directors or beneficial owner.
“Piercing the veil of companies and going after such people is very difficult, especially when the goods may not be held in this place,” he said, adding that the case risks being a “big victory” for the government.
Robertson also noted that the liquidation could increase pressure on the National Crime Agency’s long-running investigation into PPE Medpro and its principals, raising the prospect that at least some public money may finally be available.
