The Conservative peer Michelle Mone and her children secretly received £29m originating from the profits of a PPE business that was awarded large government contracts after she recommended it to ministers, documents seen by the Guardian indicate.
Lady Mone’s support helped the company, PPE Medpro, secure a place in a “VIP lane” the government used during the coronavirus pandemic to prioritise companies that had political connections. It then secured contracts worth more than £200m.
Documents seen by the Guardian indicate tens of millions of pounds of PPE Medpro’s profits were later transferred to a secret offshore trust of which Mone and her adult children were the beneficiaries.
The leaked documents, which were produced by the bank HSBC, appear to contradict that statement. They state that Mone’s husband, the Isle of Man-based financier Douglas Barrowman, was paid at least £65m in profits from PPE Medpro, and then distributed the funds through a series of offshore accounts, trusts and companies.
The ultimate recipients of the funds, the documents indicate, include the Isle of Man trust that was set up to benefit Mone, who was Barrowman’s fiancee at the time, and her children. In October 2020, the documents add, Barrowman transferred to the trust £28.8m originating from PPE Medpro profits.
That was just five months after Mone helped PPE Medpro secure contracts to supply masks and sterile gowns for use in the NHS.
Contacted about the new disclosures, HSBC said it was unable to comment, even to confirm if the couple had been clients. A lawyer for Mone said: “There are a number of reasons why our client cannot comment on these issues and she is under no duty to do so.”
A lawyer who represents both Barrowman and PPE Medpro said that a continuing investigation limited what his clients were able to say on these matters. He added: “For the time being we are also instructed to say that there is much inaccuracy in the portrayal of the alleged ‘facts’ and a number of them are completely wrong.”
The Guardian has previously reported how those claims seem to be at odds with documents appearing to show the couple were secretly involved in PPE Medpro’s business, and emails suggesting Mone repeatedly lobbied the government on its behalf during the nine-month period after she helped secure its place in the VIP lane.
However, the Guardian’s latest revelation – that the peer and her husband secretly amassed an offshore fortune on the back of PPE Medpro profits – could prove the most consequential for Mone, who has already been placed under investigation by the House of Lords commissioner for standards.
Separately, PPE Medpro has become the subject of a potential fraud investigation by the National Crime Agency. In April this year, NCA officers searched several addresses, including the mansion Mone and Barrowman occupy in the Isle of Man. At the time, lawyers for PPE Medpro declined to comment on the NCA investigation.
The controversy over Mone and PPE Medpro threatens to embroil the prime minister, Rishi Sunak, who has pledged to make “integrity and accountability” pillars of his leadership. David Cameron, who was himself embroiled in a lobbying scandal last year, was the Conservative leader who appointed Mone the baroness of Mayfair in 2015. The former owner of a lingerie business, she has proven to be one of the party’s most high-profile and controversial peers.
The Guardian understands that HSBC launched its own investigation following media reports about Mone’s apparent links to PPE Medpro, which raised potential concerns for the bank. A report produced by HSBC on the couple and their links to PPE Medpro stated that it did “not manage to corroborate” those concerns.
In the process of investigating the couple, however, HSBC pieced together a money trail showing that Barrowman had transferred tens of millions in PPE Medpro profits through a network of offshore entities. About £29m ended up in the trust benefiting Mone and her children, the report indicates.
The bank’s investigation noted that “large value inter-account transfers” originating from PPE Medpro were being routed through Barrowman’s offshore accounts, often crediting and debiting within minutes of each other.
The internal bank report described the money flows as “unusual activity”, noting a concern that Barrowman “may be attempting to conceal the true origins of the funds through multiple layers of transactions creating a distance between the receipt of PPE funds and the final beneficiaries”.
Referring to Mone, it concluded that the transfers “suggest a UK peer in the House of Lords has benefited from a contract with the UK government”. Barrowman is understood to have told HSBC that his wife had “no involvement” in the business activities of PPE Medpro, and the onward transfer of its profits via his personal bank account had been made “in his personal capacity”.
HSBC was unable to corroborate any concerns of wrongdoing by the couple, but it did identify a number of “risks” related to retaining Barrowman and Mone as clients – including what it saw as potential reputational damage to the bank. Multiple sources have told the Guardian that HSBC then decided to drop the couple as clients.
Message and money trails
Mone and Barrowman have long denied any involvement in PPE Medpro, or any role in the process through which it was awarded government contracts. However, over the last two years the Guardian has ascertained multiple instances in which the couple appear to have been involved in the business.
Mone told her fellow Conservative politicians that large quantities of PPE could be procured via “my team in Hong Kong”.
Cabinet Office officials then added PPE Medpro to the VIP lane, which was used by the government early in the pandemic to prioritise referrals from politically connected companies.