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Is Michelle Mone a successful businesswoman or simply fortunate to hold the title of baroness?

Is Michelle Mone a successful businesswoman or simply fortunate to hold the title of baroness?


During her recent interviews, Michelle Mone, a Conservative peer, made a shocking confession that she had been lying for years about her participation in profitable PPE contracts. However, she continued to assert a fundamental aspect of her impressive success. With her hands folded neatly in her lap, she insisted to the BBC’s Laura Kuenssberg that she was a highly accomplished businesswoman.

Mone, along with her husband Doug Barrowman who is based in the Isle of Man, is currently under investigation by the National Crime Agency for potential bribery and fraud related to securing government contracts worth £200m for their company, PPE Medpro. Although they both acknowledge their involvement in the company, they maintain their innocence and deny any illegal activities.

It is noteworthy that the couple, in stark contrast to their previous staunch denials, are now asserting that it was Mone’s business expertise and connections that allowed them to provide PPE.

“I have accumulated 25 years of experience in manufacturing, which is one of the factors that led to my appointment in the House of Lords,” Mone explained to Kuenssberg in December. When the Covid pandemic emerged, she recalled, “I turned to Doug and realized that we could make a significant impact here. I have connections with key individuals in the Far East and I reached out to Michael Gove.”

During the BBC interview, Barrowman stated that he and Michelle had previously made a similar assertion in a YouTube film sponsored by PPE Medpro, which was released a week prior. He explained that they both realized they had strong connections in the Far East and Michelle reached out to her contacts. They then formed a consortium with a Hong Kong-based company and a UK-based company.

Examining the records, though, brings up doubts regarding whether Mone truly utilized her connections in the east, as currently asserted – or if her primary purpose was to take advantage of her political ties with the Tory party to obtain those profitable deals.

There is controversy surrounding her assertions of being a successful businesswoman. Prior to receiving a peerage, her company was on the brink of bankruptcy and required intervention.

After David Cameron’s return to government and his recent appointment to the House of Lords, it is evident that there is a direct link between the peerage he granted to Mone in 2015 and the PPE Medpro “VIP lane” scandal that is harming the Tories’ reputation among voters.

Screengrab of Barrowman and Mone sitting next to each other in a living room, with Barrowman gesturing as he speaks

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The consortium and Hong Kong

In May 2020, Mone reached out to ministers Michael Gove and Theodore Agnew on behalf of PPE Medpro. She proposed the idea of supplying PPE through her team in Hong Kong. This offer was expedited through the government’s “VIP lane” for individuals with political connections. Within a few weeks, the newly established company was granted two contracts totaling £203m.

Subsequently, the Guardian uncovered evidence from confidential financial records that suggested Barrowman, despite initially denying any connection, had received a sum of at least £65 million from the profits of PPE Medpro. He then transferred £29 million into a trust, with Mone and her three adult children listed as beneficiaries.

During the BBC interview, Barrowman acknowledged earning millions in profits. However, he failed to mention that three additional companies were also involved in the distribution of the PPE and, according to a report by The Guardian, had collectively received an additional £30 million in profits. One of these companies received a substantial fee for connecting another company in Hong Kong.

The Guardian’s obtained documents exposed the setup of the operation. PPE Medpro had made a deal with another company, where the latter agreed to provide the PPE. In the agreement, PPE Medpro specified that its responsibility was to utilize its “extensive network” to secure contracts from the British government. The Guardian has continuously inquired with Mone and Barrowman about whether this meant using Mone’s political ties with Tory ministers. They have yet to give a direct answer to this inquiry.

The responsibility of managing and securing the supply chain for essential PPE items from both China and other countries was given to Loudwater Trade and Finance Ltd, a London-based company.

Loudwater then entered into an agreement with Neumer Trading, a separate company, to be introduced to Eric Beare in Hong Kong. Eric Beare purchased PPE from Chinese factories. All three parties, Loudwater, Eric Beare, and Neumer Trading, have chosen not to provide any comments.

Following their interviews on air, the Guardian inquired of Barrowman and Mone the reason behind the intermediary company being paid for an introduction in Hong Kong, despite the baroness having connections with influential individuals in the Far East.

They avoided addressing this question directly.

The government refused to accept all the PPE that was delivered to meet the two contracts. They are now taking legal action against PPE Medpro to return the £122m that was paid. PPE Medpro is fighting the claim, stating that the surgical gowns were suitable for their intended use.

Page of a brochure showing a pack shot of a face mask and a picture of a man wearing it, with some product information

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Mone and Ultimo

Mone’s boasts about her remarkable achievements in business, influential connections in Asia, and extensive background in manufacturing stem primarily from her lingerie brand, Ultimo. This brand catapulted her to fame and fortune almost twenty years ago, solidifying her status as a celebrity tycoon.

In the 2000s, Mone established MJM International, also known as Ultimo, alongside her former spouse, Michael Mone. The company gained significant financial success, generating a pre-tax profit of nearly £1m in 2007-08. It is believed that Michael Mone primarily oversaw the business operations, while Michelle Mone excelled in branding and marketing. The brand’s popularity grew with the rise of celebrity culture, as glamorous photographs featuring models and later, Mone herself, wearing Ultimo lingerie were prominently featured online.

In August 2015, Cameron selected Mone, who had sided with the union in the Scottish independence vote, as his “entrepreneurship advisor”, and granted her a peerage later that month. The government praised her for her achievements, describing her as a “top entrepreneur” and highlighting her success in expanding the lingerie brand internationally before its sale for millions of pounds last year.

Despite being largely overlooked, the truth revealed in official records from Ultimo and a harsh ruling from a 2014 employment tribunal paints a less glamorous picture. It seems that Mone did not actually earn millions from the company’s sale. In reality, the company was on the brink of financial collapse before being saved by a clothing manufacturer from Sri Lanka, MAS Holdings.

Beginning in 2011, the marriage of the Mones began to deteriorate and the company’s success declined. In February 2015, Michelle Mone publicly shared some of the aftermath, releasing an autobiography that was heavily featured in the Daily Mail. The media was abuzz as Mone revealed that she had damaged Michael’s Porsche with a knife, deflated his car tires, cut holes in his boxer shorts, and even put laxatives in his coffee.

A legal case was filed in Glasgow by the operations director of Ultimo, Mr. Scott Kilday, stating that he was unjustly terminated due to the bugging of his office following the takeover by MAS. The ruling revealed the financial troubles faced by MJM prior to the takeover, stating that by May 2012, the company was in a dire financial situation and at risk of becoming insolvent if it did not find a buyer.

Mone made an agreement with MAS, who compensated her with £1.3m for purchasing the company. Prior to this, she had to acquire over 50% of the shares from Michael and another minor shareholder. Subsequently, a new company was established and Michelle took on the role of director.

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Michelle Mone in ermine robes standing flanked by Iain Duncan Smith and George Osborne, both in dark suitsView image in fullscreen

The director of MAS, Eliaz Poleg, became worried that Kilday, a crucial employee, might leave for Michael’s new company or was sharing information with Michael. However, Kilday denied these allegations.

The tribunal observed that Mr. Poleg strongly desired for [Kilday] to remain, as he saw him as the crucial element in keeping the business running smoothly. Without [Kilday], [Poleg] had no one else to rely on and keep the company afloat. Mrs. Mone was not actively involved in the day-to-day operations and Mr. Mone had already departed from the business.

Poleg reluctantly made the decision to secretly install a recording device in Kilday’s office. He asked another representative from MAS and Mrs. Mone to help with the arrangements. When Kilday found the device hidden in a plant pot, he was shocked and promptly quit.

The MAS takeover involved a new company being formed, Ultimo Brands International. Initially, MAS owned 51% of this new company and Mone 49%. Despite investment from MAS, Ultimo continued to make losses. By January 2015, MAS had invested more and Mone’s stake had been reduced to 20%.

When questioned about Mone’s compensation for decreasing her ownership stake, a representative from MAS stated that the company was still investing in the business in hopes of improving it. The spokesperson also mentioned that MAS’s ownership share increasing to 80% was a result of their ongoing investments.

Mone declined to answer inquiries from the Guardian regarding these monetary agreements.

Unfortunately, Ultimo was unable to bounce back and Mone’s ownership was reduced even more. It seems that she still held a small portion of the company when the choice was made in August 2018 to hire a liquidator and shut down Ultimo.

A peerage that is already established and cannot be changed.

In 2015, one year after the Kilday employment tribunal was covered by the media, and only six months after Mone’s autobiography was released, Cameron appointed her as the government’s “entrepreneurship tsar”. She was tasked with leading a review for the Department for Work and Pensions (DWP) on how to support individuals from disadvantaged backgrounds in starting their own businesses.

As the former work and pensions secretary, Iain Duncan Smith expressed his pleasure at her selection, stating, “I cannot think of anyone more qualified.” Shortly after, Cameron named her Baroness Mone of Mayfair and granted her a seat in the House of Lords.

Reflecting on that time, it is noteworthy to remember the widespread disapproval from her home country of Scotland. The Mones and their Ultimo business were better known there than in England, where newspapers delighted in covering the scandalous “Baroness Bra.”

The managing director of Gap Group, a major plant hire company in Glasgow, Douglas Anderson, expressed his opinions in a letter to Cameron. Anderson stated, “Ms Mone is not a successful entrepreneur, but rather a small-scale businesswoman with exaggerated PR exposure that does not reflect her actual achievements.”

David Mundell photographed walking along a street

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According to the Guardian, David Mundell, who was the secretary for Scotland at the time, stated that Downing Street violated tradition by not consulting with the Scotland Office about proposed Scottish peerages.

“I was disappointed that the proper procedures were not followed and that the Scotland Office was not consulted for information or input before the peerage was finalized,” expressed Mundell. “It was not surprising to hear that Scottish businesses were dissatisfied with the appointment.”

I informed Downing Street that Scottish business leaders were dissatisfied because they did not view Michelle Mone as a significant businesswoman.

The DWP evaluation fell short of Mone’s promised results. There was a bit of embarrassment when Mone shared a photo on Twitter of herself in a government Jaguar, being driven in Stockport while using the car’s air-conditioning to dry her top. She tweeted, “The things you do. In Government car drying my travel top. Love it so much.”

The report from Downing Street was released ahead of schedule by three months. It contained suggestions to assist in the establishment of new businesses, but despite the government’s commitment to budget cuts, no additional funding was provided to implement these ideas. Mone, the author of the report, emphasized her ongoing efforts to establish bank-funded enterprise hubs on a personal level, but this plan never came to fruition. The promised conclusion of the review was never produced.

The DWP did not answer the Guardian’s questions about its statement that Mone had sold 80% of Ultimo in a multimillion-pound sale in 2014, or about her performance on the review, or why the report had been published early.

A representative for Mone, Barrowman, and PPE Medpro responded to inquiries by stating: “Michelle Mone originated from a lower-income family in the East End of Glasgow and put in tremendous effort to achieve success as an entrepreneur, creating one of the largest independent lingerie brands globally. She also served on the board of the Prince’s Trust for numerous years, aiding the development of future entrepreneurs. Michelle possesses real-life expertise that sets her apart from the average politician in Westminster.”

“David Cameron extended an invitation to Michelle to join the House of Lords in recognition of her contributions during the Scottish referendum campaign. Her appointment was thoroughly reviewed and approved by Holac, the House of Lords Appointments Commission.”

The representative also stated that it is ridiculous to suggest that Michelle did not have any manufacturing experience despite successfully running a lingerie company for many years.

Holac’s responsibility is to screen individuals who have been nominated as peers “for propriety”. If there are any legal or regulatory concerns, such as an ongoing tax investigation, Holac has the authority to withhold their support.

Cameron and Smith did not reply to requests for comments. A spokesperson from the Cabinet Office noted that Holac conducts vetting for all peerages.

A senior member of the Conservative party claimed that Cameron was drawn to the notion that Mone, a young Scottish entrepreneur, could improve the party’s image in the House of Lords. However, he failed to thoroughly examine her professional background. Five years later, when the Covid pandemic struck, she was appointed as a baroness and given access to the “VIP lane” for potential wealth.

Source: theguardian.com