Hedge fund fast-tracked to £252m PPE deal ‘despite red flags on finances’, High Court told

·4-min read

A hedge fund with close ties to government was fast-tracked to a £252 million PPE contract as an “URGENT VIP CASE” despite red flags on its finances, the High Court heard on Tuesday.

Ayanda Capital was handed deals to supply face masks at the end of April last year, after its bid was marked as “very urgent” and officials were told the supplier was “influential across government”.

Some of the masks which were delivered were rendered unusable by the NHS as they did not meet safety standards, the court heard.

The Good Law Project and EveryDoctor are challenging the way PPE contracts worth almost £600 million were entered into in the early stages of the pandemic, through the government’s controversial ‘VIP Lane’.

They say companies with political connections were given unfair advantage in the scramble for PPE deals, while suppliers without ties to government were left sitting on the sidelines.

It is said the government failed to carry out due diligence on the PestFix and Ayanda deals, including investigations into the firms’ finances and the technical specifications of the PPE being offered.

In written submissions to the court, lawyers for the Good Law Project set out how Andrew Mills, a representative for Ayanda and former member of the UK Board of Trade, lobbied an official in the PPE procurement team.

Mr Mills and Ayanda were put into the ‘VIP Lane’ after telling Martin Kent, director of Global Trade and Investment at the Department for International Trade, their bid was “the sort of deal that really needs Ministerial attention”.

The offer of masks was then “fast-tracked through the system”, according to internal government messages, with Mr Mills’ standing in government repeatedly mentioned.

On April 17 last year, an official wrote an email to say: “Can we expedite this one please? It’s a big opportunity - masks - and we are close to loosing it. Our contact has close ties to DIT (Department for International Trade) so wouldn’t be a good outcome”.

On a later offer from Ayanda of gloves, the same official wrote: “I am getting a lot of escalations from this supplier, who is influential across government, on the lack of response he is getting. Can you advise what the hold-up is please so we can communicate better.”

Emails were sent about the potential Ayanda deal, marked as “URGENT VIP CASE” and “VERY URGENT VIP ESCALATION”, the court heard.

Two days before the £252.5 million contract was signed, a Cabinet Office official raised “major issues or concern” about the Ayanda contract, including a complete lack of financial information.

Despite the red flag, the deal was signed with some officials believing due diligence had been completed, the court heard.

Natwest tried to stop the payment, the court heard, and a government official commented: “sh*t hit the fan…due diligence hadn’t been carried out on Ayanda - I think something went wrong!!! big style!”

It later emerged that the Chinese manufacturer of Ayanda’s masks had received a string of ‘penalties’ in the last five years over “product quality issues”.

Pestfix, a family-run company with no history of supplying PPE, won six deals worth £342 million, after being put into the VIP Lane through a connection to the Chief Commercial Officer at the Department of Health and Social Care.

Some of the masks it provided also failed to meet NHS standards, while the Good Law Project alleges gowns it offered to supply in a deal worth almost £1 million were secured in China by an agenda “bribing local officials”.

“Being a VIP supplier meant getting a ‘foot in the door’, by your offer getting initial consideration by an official, and then being guided through the award process up to contract signature”, said Jason Coppel QC, leading the legal team for the Good Law Project.

“There was widespread unfair and unequal treatment of suppliers, favouritism towards suppliers who had personal connections within Government, failure to apply basic safeguards and large-scale acquisition of PPE which was unfit for purpose, at huge cost to the taxpayer.”

Matt Hancock, the Secretary of State for Health and Social Care, is fighting the judicial review case, arguing the award of contracts did not breach duties of transparency and equality of treatment, there was sufficient reason for deals, and the decision-making process was not “irrational”.

On Tuesday morning, Mrs Justice O’Farrell ruled that the specific amount of money “wasted” on unusable PPE should not be revealed, as it is not a key part of the dispute. The names of junior officials in internal emails will also be kept secret.

The hearing continues.

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