Fifth of UK Covid contracts ‘raised red flags for possible corruption’
April 22, 2021, 10:10 am

Fifth of UK Covid contracts ‘raised red flags for possible corruption’

A care home worker wearing PPE cleans a window in May 2020.

Report finds ‘apparent systemic bias’ in award of lucrative PPE deals favouring firms connected to Tories

One in five government Covid contracts awarded between February and November 2020 contained one or more red flags for possible corruption and require urgent further investigation, a respected campaign group has warned.

Transparency International UK said a “seriously flawed” arrangement, whereby companies bidding for contracts were prioritised if they were referred into a “VIP lane” by their political connections, had “damaged trust in the integrity of the pandemic response”.

The group said Boris Johnson’s government must urgently disclose the identities of companies awarded public money through the VIP lane, which was set up by the Cabinet Office and the Department of Health and Social Care in the early days of the pandemic.

The government has so far refused to name the companies granted public money through the scheme, citing “commercial confidentiality”. It has previously claimed the purpose of the arrangement was to triage large numbers of offers to help from the private sector.

Transparency International UK said its analysis indicated “apparent systemic biases in the award of PPE contracts that favoured those with political connections to the party of government in Westminster”, contrary to denials by civil servants and Conservative ministers.

The group said it had identified 73 Covid-related contracts with multiple factors that would ordinarily be treated as red flags for possible corruption, such as the company being politically connected. Twenty-seven PPE or testing contracts worth £2.1bn were awarded to firms with connections to the Conservative party, it claimed.

The group said it had also identified £255m of contracts awarded to companies that had only been incorporated within the previous 60 days. The figure is surprising because the short lifespan of the companies suggests they cannot have had any track record of actual business.

Many of the contracts were awarded without competitive tender. The government has acknowledged suspending tender processes for Covid procurement, arguing that the urgency of the pandemic required it to move more quickly than a tender process would allow.

The report, Track and Trace, is compiled by researchers working for the UK chapter of the international organisation Transparency International. The group is respected in anti-corruption policy circles and publishes an annual corruption perceptions index that frequently informs national anti-bribery strategies.

Steve Goodrich, a senior research manager at the group, said there was disquiet at “patterns that you cannot explain away”, in particular the creation of the VIP lane.

“Fine, you have to triage ,” he said. “Why on earth would you ask politicians to do that? Did they even ask any medical experts? Or was it just prioritised on the basis of who managed to ring the right person at the right time?”

The existence of the VIP lane was confirmed in a report last November by the National Audit Office. During a global rush for PPE that rapidly forced up prices, the government said it received large numbers of unsolicited and improbable bids for lucrative public contracts.

It said the high-priority lane allowed it to triage the large number of unsolicited offers of aid by prioritising those referred by government ministers, MPs, peers or health officials as credible companies that should be taken seriously, rather than chancers.

However the government’s repeated refusal to identify any beneficiaries of the scheme has prompted suspicion that it could have been used to disburse public funds to friends of the Conservative party. Companies referred into the VIP lane were 10 times more likely to be awarded a government contract.

Transparency International’s report makes 10 recommendations for urgent action by government, including immediate disclosure of the beneficiaries of the VIP lane contracts, a return to competitive procurement by default, and transferring responsibility for enforcing the ministerial code to an office independent of government and accountable to parliament.

A government spokesperson said: “During the pandemic our priority has always been to protect the public and save lives, and we have used existing rules to buy life saving equipment and supplies, such as PPE for the NHS frontline.

“All PPE procurement went through the same assurance process and due diligence is carried out on every contract – ministers have no role in awarding them.

“The priority list was widely advertised across government as a way of more quickly triaging offers of support.”

source: David Pegg

Levant

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BENEFIT, the Kingdom’s innovator and leading company in Fintech and electronic financial transactions service, held its Annual General Meeting (AGM) at the company’s headquarters in the Seef District.
During the meeting, shareholders approved all items listed on the agenda, including the ratification of the minutes of the previous AGM held on 26 March 2024. The session reviewed and approved the Board’s Annual Report on the company’s activities and financial performance for the fiscal year ended 31 December 2024, and the shareholders expressed their satisfaction with the company’s operational and financial results during the reporting period.
The meeting also reviewed the Independent External Auditor’s Report on the company’s consolidated financial statements for the year ended 31 December 2024. Subsequently, the shareholders approved the audited financial statements for the fiscal year. Based on the Board’s recommendation, the shareholders approved the distribution of a cash dividend equivalent to 10% of the paid-up share capital.
Furthermore, the shareholders endorsed the allocation of a total amount of BD 172,500 as remuneration to the members of the Board for the year ended 31 December 2024, subject to prior clearance by related authorities.
The extension of the current composition of the Board was approved, which includes ten members and one CBB observer, for a further six-month term, expiring in September 2025, pending no objection from the CBB.
The meeting reviewed and approved the Corporate Governance Report for 2024, which affirmed the company’s full compliance with the corporate governance directives issued by the CBB and other applicable regulatory frameworks. The AGM absolved the Board Members of liability for any of their actions during the year ending on 31st December 2024, in accordance with the Commercial Companies Law.
In alignment with regulatory requirements, the session approved the reappointment of Ernst & Young (EY) as the company’s External Auditors for the fiscal year 2025, covering both the parent company and its subsidiaries—Sinnad and Bahrain FinTech Bay. The Board was authorised to determine the external auditors’ professional fees, subject to approval from the CBB, and the meeting concluded with a discussion of any additional issues as per Article (207) of the Commercial Companies Law.
Speaking on the company’s performance, Mr. Mohamed Al Bastaki, Chairman BENEFIT , stated: “In terms of the financial results for 2024, I am pleased to say that the year gone by has also been proved to be a success in delivering tangible results. Growth rate for 2024 was 19 per cent. Revenue for the year was BD 17 M (US$ 45.3 Million) and net profit was 2 Million ($ 5.3 Million).

Mr. Al Bastaki also announced that the Board had formally adopted a new three-year strategic roadmap to commence in 2025. The strategy encompasses a phased international expansion, optimisation of internal operations, enhanced revenue diversification, long-term sustainability initiatives, and the advancement of innovation and digital transformation initiatives across all service lines.
“I extend my sincere appreciation to the CBB for its continued support of BENEFIT and its pivotal role in fostering a stable and progressive regulatory environment for the Kingdom’s banking and financial sector—an environment that has significantly reinforced Bahrain’s standing as a leading financial hub in the region,” said Mr. Al Bastaki. “I would also like to thank our partner banks and valued customers for their trust, and our shareholders for their ongoing encouragement. The achievements of 2024 set a strong precedent, and I am confident they will serve as a foundation for yet another successful and impactful year ahead.”
Chief Executive of BENEFIT; Mr. Abdulwahed AlJanahi commented, “The year 2024 represented another pivotal chapter in BENEFIT ’s evolution. We achieved substantial progress in advancing our digital strategy across multiple sectors, while reinforcing our long-term commitment to the development of Bahrain’s financial services and payments landscape. Throughout the year, we remained firmly aligned with our objective of delivering measurable value to our shareholders, strategic partners, and customers. At the same time, we continued to play an active role in enabling Bahrain’s digital economy by introducing innovative solutions and service enhancements that directly address market needs and future opportunities.”
Mr. AlJanahi affirmed that BENEFIT has successfully developed a robust and well-integrated payment network that connects individuals and businesses across Bahrain, accelerating the adoption of emerging technologies in the banking and financial services sector and reinforcing Bahrain’s position as a growing fintech hub, and added, “Our achievements of the past year reflect a long-term vision to establish a resilient electronic payment infrastructure that supports the Kingdom’s digital economy. Key developments in 2024 included the implementation of central authentication for open banking via BENEFIT Pay”
Mr. AlJanahi concluded by thanking the Board for its strategic direction, the company’s staff for their continued dedication, and the Central Bank of Bahrain, member banks, and shareholders for their valuable partnership and confidence in the company’s long-term vision.