A winding up petition has been lodged for a company connected to the Conservative peer Michelle Mone that received $203 million worth of government PPE contracts during the pandemic, allegedly for unpaid taxes. After Lady Mone approached Michael Gove in May 2020 with an offer to sell personal protective equipment, PPE Medpro Ltd was given two contracts through the government’s “VIP lane.” The National Crime Agency (NCA) is already looking into it for suspected fraud.
What happened?
The winding up petition was filed against the corporation on Thursday morning, according to information originally revealed by court blogger, Daniel Cloake. No information was provided on the amount of tax that is allegedly owing or how long it has been due. HMRC representative declined to offer any more details, citing a rule against speaking on specific companies.
Theodore Agnew, a fellow Tory peer, received an email from Mone on May 8, 2020, informing him that Gove had requested her to “urgently” contact him, according to prior information from a reliable source. She suggested giving the government a huge number of face masks, assuring Agnew they could be secured through “my team in Hong Kong.”
Agnew, who was in charge of procurement at the Cabinet Office at the time, forwarded Mone’s offer to employees who handled it in the exclusive VIP “high priority lane” for well-connected people. PPE Medpro Ltd, the company that received the contracts, wasn’t integrated until May 12, 2020, four days after Mone contacted Agnew.
A month later, the company received its first contract for the supply of 210 million face masks for approximately £80.85 million. Two weeks later, the Department of Health and Social Care granted the second contract for 25 million surgical gowns at a cost of £122 million. In accordance with COVID-19 emergency regulations, both contracts were given promptly, without competitive proposals.
After the Department of Health and Social Care rejected the gowns, the second contract became the subject of a dispute, and it has since said that it is seeking to recover its money through the dispute resolution process. PPE Medpro has argued that because it followed the terms of the original contract, it is entitled to keep the money it was paid.
In its first set of financial statements for the year ending 5 April 2021, the company admitted that it had no assets, had earned £3.9 million in sales, owing another £4 million, and owed £913,019 in taxes and social security that were due within the next year.
Mone has consistently denied having any involvement with PPE Medpro. According to her lawyers, “Baroness Mone is not an investor, director, or shareholder in any way linked with PPE Medpro.” She has never had any position or function inside PPE Medpro, nor in the method used to award PPE Medpro contracts.
Although his legal counsel has not made any statements on whether or not he had financial benefits from the company, her spouse, Isle of Man-based investor Douglas Barrowman, has also distanced himself from the company.
Some sources allegedly claimed that apparently stolen documents suggested Mone and Barrowman were secretly participating in the PPE Medpro business. In response, Mone’s legal counsel stated that the Guardian’s conclusions had been “based completely on supposition and speculation and not on accuracy.”
Martin Jelley, the House of Lords requirements commissioner, then began an ongoing inquiry to determine if Mone’s ties to the company violated the rules pertaining to members. She has denied doing anything improper. The offices of PPE Medpro Ltd. and its affiliated business with the same name that is registered in the Isle of Man were among the locations where the NCA carried out search warrant executions in April, along with a number of other properties.
Anthony Page, the director of PPE Medpro, stated: “The directors have not yet received any letter or notice” thus they are not aware of this action. The business will continue to work with HMRC and make sure that any outstanding taxes are paid in full.
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Our specialist winding up petition lawyers will thoroughly advise you on the strengths and weaknesses of your case. Being the masters of insolvency dispute litigation, we assist our clients in the best possible way when it comes to opposing winding up petitions and negotiating with the creditors.
If you have been issued a winding up petition, you may challenge the petition on the following grounds:
• the debt alleged in the statutory demand or petition owed is genuinely disputed on substantial grounds by your company;
• your company has a legitimate right of set-off against the creditor that exceeds the amount claimed in the statutory demand; or
• in certain other limited circumstances (for example such as jurisdiction, technical or procedural error or delay).
In order to oppose a winding up petition, you will have to file a witness statement no later than 5 business days before the date when the petition will be heard by the Court as stated in rule 7.16 of the Insolvency (England and Wales) Rules 2016. You are also required to provide a copy of that witness statement to the petitioning creditor at least 5 business days before the hearing. It is common for the companies to instruct Solicitors and/or Barristers to appear on their behalf at the petition hearing.
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