TAXPAYERS are unlikely to see an astonishing £187m owed by a PPE firm linked to Baroness Mone after it was wound up today.
PPE Medpro supplied 25 million useless surgical gowns for the National Health Service at the height of the Covid pandemic – after lobbying by ‘Baroness Bra’ Michelle Mone.
But the Government had handed over £122m for the unusable personal protection equipment, and had to wage a lengthy legal action before a court two months ago ordered the firm to pay the money back, plus interest and legal costs of £26m.
The firm was also being pursued for unpaid taxes of £39m by HMRC.
It now looks increasingly unlikely the mountain of cash will ever be refunded however, after the Insolvency and Companies Court in London ruled that PPE Medpro must be wound up, with just a pittance in assets against money owed.
PPE Medpro was under the control of Baroness Mone’s controversial businessman husband Doug Barrowman. She long denied any involvement with the firm, before admitting she had lobbied ministers over business amounting to £200m.
But PPE Medpro was a limited company, and those who made money from it are shielded from being pursued for its debts – unless it were to be proved their activities had been fraudulent or improper.
Baroness Mone and Mr Barrowman have had £75m of their assets frozen and are under a long-running fraud investigation by the National Crime Agency, but have not been charged with any offences. They deny any wrongdoing.
The Insolvency and Companies Court had heard that PPE Medpro filed for administration the day before the October High Court ruling that it had to pay back to the Department for Health and Social Care (DHSC) £122m plus interest and costs, for breach of contract.
At today’s hearing, barristers for the DHSC asked judge Sebastian Prentis to wind up the company because it was ‘hopelessly insolvent’.
Judge Sebastian Prentis placed the company into liquidation, saying: ‘The correct course is now to discharge the administrators and to compulsorily wind up the company.’
Records filed by PPE Medpro’s administrators last month showed that, as well as the money owed to the DHSC, His Majesty’s Revenue and Customs was also claiming £39 million in tax.
But the filings revealed the staggeringly profitable firm only had around £600,000 available to pay unsecured creditors.
Simon Passfield KC, for PPE Medpro’s joint administrators, said in written submissions that the company had one secured creditor, Angelo (PTC) Limited, which, according to Companies House, is registered in the Isle of Man – where Baroness Mone and Mr Barrowman have a sprawling estate.
Mr Passfield added that the DHSC was the firm’s largest unsecured creditor and had ‘expressed a clear preference for the company to move immediately into compulsory liquidation’.
In court, the barrister said that PPE Medpro had ‘sufficient property; to pay off its 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.
He said: ‘The administrators are as best placed as any liquidator to achieve the best outcome for creditors as a whole.’
David Mohyuddin KC, for the DHSC, said in written submissions that there was no ‘realistic alternative’ to winding up the company.
He said: ‘The only order that the court needs to, and should, make is that Medpro be wound up.’
He continued: ‘The court’s discretionary power to make a winding-up order against Medpro is clearly engaged: it is obviously and very significantly insolvent.’
Baroness Mone, elevated to the House of Lords by Conservative Prime Minister David Cameron, denies any responsibility for PPE Medpro or its debts, and claims the Government has a vendetta against her.
There have been suggestions the firm could sue the suppliers who provided it with the useless gowns, but commentators say there is little chance of success.
