Thread by @DanNeidle

The PPE cover-up. New evidence suggests Douglas Barrowman hid the ownership of a company that received £200m in PPE contracts and is now being investigated for fraud.

A thread:

During the pandemic, Baroness Mone referred a company called PPE Medpro to the Department of Health and Social Care to supply PPE equipment.

PPE Medpro Limited was awarded two contracts to supply PPE equipment in June 2020, worth £200m, having been referred through the "High Priority Lane" by Baroness Mone.

Mone has said she is in no way associated with PPE Medpro. Lots of press coverage has been highly sceptical of this.

At the time, PPE Medpro’s shares were owned by an accountant, Anthony Page.

Sometimes the true owner of a company – the “person with significant control” (PSC) – can be different from the shareholder. But the Companies House register showed Mr Page as the sole PSC:

At the same time, Anthony Page was the managing director of the Knox Group.

… which was (and is) owned by Mone’s husband, Douglas Barrowman:

Another director of PPE Medpro was Voirrey Coole – who was the director of another Barrowman company.

This suggests three possibilities:

1. PPE Medpro was a private venture of Mr Page, and nothing to do with Mr Barrowman.

2. Barrowman’s Knox Group was engaged to provide corporate services for an unknown third party, and Mr Page was the shareholder as a Knox employee

3. Mr Barrowman was the true owner of PPE Medpro. The Guardian says it has a document listing PPE Medpro and LFI Diagnostics as “entities” of the Barrowman family office (but Tax Policy Associates has not seen that document, and so we cannot independently assess this claim).

How plausible are the three scenarios?

Scenario 1: Mr Page owned PPE Medpro in his own right

New evidence means that this scenario can now be ruled out.

The Sunday Times reported last week that Anthony Page was dismissed from the Knox Group for “gross misconduct”...

... if Mr Page owned PPE Medpro in his own right then his ownership of PPE Medpro would have been unconnected with his employment by the Knox Group. Page would have remained the PSC of PPE Medpro when the Knox Group fired him.

But instead he was replaced:

Mr Page’s replacement as PSC, Arthur Lancaster, is closely connected to Douglas Barrowman and the Knox Group. Lancaster was recently described by a tax tribunal as “seriously misleading”, “evasive” and “lacking in candor”.

The obvious inference is that Mr Page held the PPE Medpro shares as part of his employment by the Knox Group and, when that employment ceased, he was required to transfer his ownership of those shares. He was not the true owner, and should not have been registered as the sole PSC

Scenario 2: Mr Page and the Knox Group are acting for some unknown third party

That is what Mone's people told the FT in 2021:

But Mr Page and Ms Coole are not acting at all like typical corporate service providers.

Mr Page actually holds the shares in PPE Medpro himself. CSPs don't do this, because of the obvious exposure to fraud/disputes.

We asked one of our contacts, very familiar with the ultra-high net worth world, whether he had ever seen a fiduciary business put a client's company's shares in an employee's own name - he described the suggestion as "insane".

And legitimate CSPs don't list themselves as the PSC - they list the real client. The failure to do this is a giveaway that something else is going on.

Scenario 3: Mr Page was acting for Douglas Barrowman

That was what the Guardian reported, based on a leaked document. We haven't seen that document - but even without it, this now seems the most plausible

Scenario 3: Mr Page was acting for Douglas Barrowman

This seems the most plausible scenario, even if we disregard the Guardian report.

If that is correct then the Knox Group has covered-up the identity of the true owner of PPE Medpro, with potentially serious legal consequences

To understand these consequences, we need to take a detour into the “people with significant control” rules

Until 2016, Companies House showed who the shareholders of a company were, but stopped there. So if, for example, a company had a “nominee” shareholder, acting at the direction of the real ultimate beneficial owner, then only the nominee would be shown in Company House’s records.

That all changed with the Small Business, Enterprise and Employment Act 2015, putting rules in place requiring companies to identify their “people with significant control” – meaning the actual humans who were able to tell the company what to do.

The definition of a PSC is set out in Schedule 1A of the Companies Act 2006, which sets out conditions that will each result in a person being a PSC. In our case, the relevant condition is in paragraph 5:

If, as appears to have happened, the Knox Group had the power to remove Mr Page as shareholder/director of PPE Medpro and replace him with Mr Lancaster, then the Knox Group (and Douglas Barrowman, as the person who controls the Knox Group) had “significant influence or control".

Mr Barrowman should have been listed as the PSC. If the Knox Group was acting for some other unknown party then they should also have been listed as a PSC.

Either way, there has been a breach.

A company is required to identify and then register its “people with significant control”.

Section 790D of the Companies Act requires a company to take reasonable steps to find out who controls it:

A company is then required by section 790M to keep and update a register of its PSCs:

And section 790VA requires entries in the company’s own PSC register to be notified to the Registrar of Companies (i.e. Companies House):

Breaking these rules triggers criminal offences for directors.

There are specific offences for breaches of ss790D, 790M and 790VA, committed by the company itself, and every director responsible. On conviction, the director faces up to two years in jail and an unlimited fine.

There is also a general Companies Act offence of knowingly or recklessly delivering a false statement or document to Companies House. Again, up to two years in jail and an unlimited fine.

If Messrs Page and Lancaster were responsible for PPE Medpro delivering statements which listed them as the PSCs, when they knew they were acting at the direction of one or more other people, then they potentially committed both offences.

Mr Barrowman may also have committed criminal offences.

He may be a "shadow director" of PPE Medpro - i.e. a person who is not formally a director but who in practice calls the shots. If that is correct, then the specific criminal offences mentioned above apply to him.

There is also a specific requirement in section 790G that, where someone knows they control a company, but they haven't received a notice from the company requiring them to provide information, then they have to inform the company:

Failure to comply with section 790G is an offence under paragraph 14 of Schedule 1B of the Companies Act 2006, again punishable with up to two years' imprisonment, and an unlimited fine.

It follows that Douglas Barrowman may have committed a criminal offence if (as is plausible) he was the PSC of PPE Medpro, knew that he wasn't correctly registered as the PSC, but took no steps to remedy that.

Often someone in this position would run the defence that they didn't understand the rules. For Mr Barrowman that may be difficult, given that he is a sophisticated businessman with years of experience in business, funds and corporate finance...

who runs a group of companies that provide technical tax and legal services to private offices. All the more so given that he knows his links with PPE Medpro have been widely reported, and that PPE Medpro is under criminal investigation.

Will there be a prosecution?

Companies House only prosecutes the most serious offences; in other cases a civil fine is typically levied.

Here there is a possibility that the offence was very serious indeed: i.e. if Mr Barrowman was the true owner of PPE Medpro, and that fact was hidden to enable his wife to recommend the company to the Department of Health and Social Care.

We wrote to Douglas Barrowman, Anthony Page and Arthur Lancaster on Friday and asked them to comment; we received no reply. That is most unusual for accusations this serious.

We are, as ever, keen to understand if there are any facts we have misunderstood, or any explanation we have missed, and we will update this thread and our report as and when we hear anything further.

We are reporting Arthur Lancaster to Chartered Institute of Taxation and the Institute of Chartered Accountants of England and Wales for his involvement in what appears to be a serious breach of the PSC rules.

We have also provided the information in this report to the Metropolitan Police, and they are currently assessing the information to establish the appropriate investigative body.

Our full report is here: taxpolicy.org.uk/2023/08/13/ppe…

And you can subscribe for updates here: taxpolicy.org.uk/subscribe

And Sunday Times coverage here thetimes.co.uk/article/questi…