Taxpayers are now almost certain to lose a staggering £187 million owed by a PPE company linked to Conservative peer Baroness Michelle Mone, after a court ordered its liquidation.
The Collapse of PPE Medpro
Today, the Insolvency and Companies Court in London ruled that PPE Medpro must be compulsorily wound up. The company, which was under the control of Baroness Mone's husband, businessman Doug Barrowman, is hopelessly insolvent. It possesses only a pittance in assets compared to the mountain of debt it owes to the government and the tax authority.
PPE Medpro secured a lucrative government contract at the height of the Covid-19 pandemic to supply 25 million surgical gowns to the National Health Service, following lobbying by Baroness Mone. The Government paid the firm £122 million for the equipment, which was later deemed unusable.
A Lengthy Legal Battle and Mounting Debts
After a protracted legal fight, the High Court ruled just two months ago that PPE Medpro had breached its contract and must repay the full £122 million, plus interest and legal costs of £26 million. Furthermore, His Majesty's Revenue and Customs (HMRC) was pursuing the firm for £39 million in unpaid taxes, bringing the total owed to the public purse to approximately £187 million.
Records filed by the company's administrators last month revealed a stark picture. While it owed this vast sum, PPE Medpro had only around £600,000 available to pay its unsecured creditors, which include the Department of Health and Social Care (DHSC).
In court, barristers for the DHSC argued there was no realistic alternative to winding up the 'obviously and very significantly insolvent' company. Judge Sebastian Prentis agreed, discharging the administrators and placing PPE Medpro into compulsory liquidation.
Limited Liability and Ongoing Investigations
The case highlights the protection offered by limited company status. Those who profited from PPE Medpro, including Baroness Mone and Mr Barrowman, are shielded from its debts unless fraud or improper conduct is proven. Baroness Mone long denied involvement with the firm before later admitting she had lobbied ministers for contracts worth £200 million.
The couple are currently under a long-running fraud investigation by the National Crime Agency and have had £75 million of their assets frozen. They deny any wrongdoing and have not been charged with any offences. Baroness Mone has claimed the Government holds a vendetta against her.
During the hearing, it was noted that PPE Medpro's one secured creditor is Angelo (PTC) Limited, a company registered in the Isle of Man – where Baroness Mone and Mr Barrowman have an estate. The administrators suggested there were potential legal claims against third parties that could recover funds, but gave no details. For now, the prospect of taxpayers recouping the £187 million appears vanishingly slim.
