Department for Health & Social Care
PPE Contract(s): CannaGrow Biosciences
An Open & Candid Investigation - September 2024
Contents
- Background
- David Extance
- APPG E-Cigarettes
- CannaGrow Directors
- Company Accounts
- Other Information
Background
It has recently been reported by the Guardian, that Covid PPE contracts awarded to CannaGrow Biosciences during the pandemic, are included in £647 million of Covid PPE contracts to be investigated by the new Covid Commissioner when they are appointed in October 2024. The recovery of these contracts was previously earmarked to be waived by the former Conservative government.
CannaGrow Biosciences was awarded two contracts in April 2020, both for the value of £16.5 million for the supply of FFP3 Facemasks. The first contract was awarded on the 12th April, with the second contract being awarded eight days later on the 20th April. The contracts were awarded without competition and required CannaGrow to deliver the goods directly to the NHS supply chain in Daventry.
CannaGrow was based in Southampton and the parent of Reverse Nature CBD. The accounts lodged on Companies House for the year ending 31st October 2019, showed that the company had £6,374 in assets, no employees other than the directors and that the directors did not receive any remuneration. The company records show that they had four directors at the time the contracts were awarded, with David Extance (the sole shareholder and founder of the company) and three other directors who did not own any shares.
It has recently been reported by the Guardian, that Covid PPE contracts awarded to CannaGrow Biosciences during the pandemic, are included in £647 million of Covid PPE contracts to be investigated by the new Covid Commissioner when they are appointed in October 2024. The recovery of these contracts was previously earmarked to be waived by the former Conservative government.
CannaGrow Biosciences was awarded two contracts in April 2020, both for the value of £16.5 million for the supply of FFP3 Facemasks. The first contract was awarded on the 12th April, with the second contract being awarded eight days later on the 20th April. The contracts were awarded without competition and required CannaGrow to deliver the goods directly to the NHS supply chain in Daventry.
CannaGrow was based in Southampton and the parent of Reverse Nature CBD. The accounts lodged on Companies House for the year ending 31st October 2019, showed that the company had £6,374 in assets, no employees other than the directors and that the directors did not receive any remuneration. The company records show that they had four directors at the time the contracts were awarded, with David Extance (the sole shareholder and founder of the company) and three other directors who did not own any shares.
David Extance
Our investigation found that David Extance had been a director of a number of companies that are now dissolved. These included motor industry related and vaping companies.
The most prominent of these companies was called E-Quits Limited and was registered at the same address as CannaGrow Biosciences.
In an article published by the Southern Daily Echo in February 2016, about the extra testing of products being demanded by EU regulations and how it could force some smaller players in the industry out of business. It was reported that E-Quits had a "brand portfolio including Lonjas UK, Vaping Warehouse, Phil the Greek, Patti Bakers Pastry, The Olde Sweetshop and manufacture for 27 other brands", "they manufacture 350 different flavours which could all need testing at £6,000 a time" and quoted David Extance as saying "we can bear the cost at the moment, many companies will go to the wall". The next part of the article is interesting in that it states "David, who advises the All Party Parliamentary Group for E-Cigarettes, explained that the new regulations, set to come in to force on May 20 were in "disarray" as the EU had said some rules were mandatory and some were being left to MHRA to set. The article then goes on to explain how E-Quits were adding brands by purchasing shares in other similar businesses. It finishes with another interesting piece of information! "Southampton Itchen MP Royston Smith has been invited to attend the next APPG in April and it is hoped that he will put pressure on Jeremy Hunt to re-evaluate the TPD Article 20, to bring sensible regulation". Then a final quote from Mr Extance ""that with a referendum due, it would be disastrous to deny a possible 3.2 million voters the right a product that - in the words of Public Health England - is 95% safer than smoking tobacco products".
At no point in the article did it mention that at in 2012/2013 that Mr Extance had set up a Facebook page for his attempt* to become the UKIP candidate for Redbridge Ward, Southampton.
*UKIP did not field a candidate in this ward in the 2014 local elections.
E-Quits was dissolved in March 2020. Though the last set of accounts filed were for the period ending 31st July 2017.
Our investigation found that David Extance had been a director of a number of companies that are now dissolved. These included motor industry related and vaping companies.
The most prominent of these companies was called E-Quits Limited and was registered at the same address as CannaGrow Biosciences.
In an article published by the Southern Daily Echo in February 2016, about the extra testing of products being demanded by EU regulations and how it could force some smaller players in the industry out of business. It was reported that E-Quits had a "brand portfolio including Lonjas UK, Vaping Warehouse, Phil the Greek, Patti Bakers Pastry, The Olde Sweetshop and manufacture for 27 other brands", "they manufacture 350 different flavours which could all need testing at £6,000 a time" and quoted David Extance as saying "we can bear the cost at the moment, many companies will go to the wall". The next part of the article is interesting in that it states "David, who advises the All Party Parliamentary Group for E-Cigarettes, explained that the new regulations, set to come in to force on May 20 were in "disarray" as the EU had said some rules were mandatory and some were being left to MHRA to set. The article then goes on to explain how E-Quits were adding brands by purchasing shares in other similar businesses. It finishes with another interesting piece of information! "Southampton Itchen MP Royston Smith has been invited to attend the next APPG in April and it is hoped that he will put pressure on Jeremy Hunt to re-evaluate the TPD Article 20, to bring sensible regulation". Then a final quote from Mr Extance ""that with a referendum due, it would be disastrous to deny a possible 3.2 million voters the right a product that - in the words of Public Health England - is 95% safer than smoking tobacco products".
At no point in the article did it mention that at in 2012/2013 that Mr Extance had set up a Facebook page for his attempt* to become the UKIP candidate for Redbridge Ward, Southampton.
*UKIP did not field a candidate in this ward in the 2014 local elections.
E-Quits was dissolved in March 2020. Though the last set of accounts filed were for the period ending 31st July 2017.
APPG E-Cigarettes
Our investigation continued to by looking at who was on the APPG for E-Cigarettes back in 2016.
According to Parliamentary business Publications & Records as of 24th Nov 2016, there were 6 officers. These were Mark Pawsey (Chair), Glyn Davies, Lord Callanan, Stephen Metcalfe (all Vice Chairs), Viscount Ridley and Mary Glindon (Secretaries). All were from the Conservative Party with the exception of Glindon who was from the Labour Party.
At the time of the pandemic Pawsey, Glindon, Ridley & Metcalfe were all still part of the group. Lord Callanan & Glyn Davies being replaced by Conservative MP's Gareth Johnson & Scott Mann.
If Extance was an advisor to the APPG, then it would be likely that he had access to MP's, particularly in 2016. He also it would appear had contact with his local Southampton Itchen MP Royston Smith,
We are not suggesting any wrong doing by any of the above.
Our investigation continued to by looking at who was on the APPG for E-Cigarettes back in 2016.
According to Parliamentary business Publications & Records as of 24th Nov 2016, there were 6 officers. These were Mark Pawsey (Chair), Glyn Davies, Lord Callanan, Stephen Metcalfe (all Vice Chairs), Viscount Ridley and Mary Glindon (Secretaries). All were from the Conservative Party with the exception of Glindon who was from the Labour Party.
At the time of the pandemic Pawsey, Glindon, Ridley & Metcalfe were all still part of the group. Lord Callanan & Glyn Davies being replaced by Conservative MP's Gareth Johnson & Scott Mann.
If Extance was an advisor to the APPG, then it would be likely that he had access to MP's, particularly in 2016. He also it would appear had contact with his local Southampton Itchen MP Royston Smith,
We are not suggesting any wrong doing by any of the above.
CannaGrow Directors
At the time the contracts were awarded, alongside David Extance, there were three other directors, Kenneth West, Mordechai Gross and Bruno Bailavoine. We find it puzzling that according to accounts filed up to 31st October 2019, West, Gross and Bailavoine were not shareholders and did not receive any remuneration, despite being named as directors between 1st June 2019 and the 18th July 2019. The accounts filed up to 31st October 2020, show that there were six employees, though again it confirms Extance as the only shareholder. We have been able to identify that one employee would have been Craig Frampton, and he is likely the son-in-law of David Extance.
Kenneth West
According to websites theorg.com and marketscreener.com, director Kenneth 'Buzz' West was the chairman at CannaGrow Biosciences. West was the Chairman of the European Wealth Group Limited, a Guernsey based Wealth Management business, this was at the same time as he was involved in CannaGrow. When looking at West's background, his involvement with CannaGrow does appear somewhat strange.
Bruno Bailavoine
Bailavoine we believe is actually Bruno Baillavoine. He is the Managing Director of Pericles Group UK Ltd. He is also a managing director or board member of a number of other companies including Gratomic Inc, Seton Services Ltd and Monty-C Limited.
Mordechai Gross
Gross is a Israeli located in Israel. We have been unable to confirm his identity.
There is a possibility that the above had invested in CannaGrow but according to companies house, they did not receive any shares in return from Canna Grow Biosciences Ltd. All three directors have since resigned from the company, Gross in June 2020, West in January 2021 and Baillavoine in August 2021.
At the time the contracts were awarded, alongside David Extance, there were three other directors, Kenneth West, Mordechai Gross and Bruno Bailavoine. We find it puzzling that according to accounts filed up to 31st October 2019, West, Gross and Bailavoine were not shareholders and did not receive any remuneration, despite being named as directors between 1st June 2019 and the 18th July 2019. The accounts filed up to 31st October 2020, show that there were six employees, though again it confirms Extance as the only shareholder. We have been able to identify that one employee would have been Craig Frampton, and he is likely the son-in-law of David Extance.
Kenneth West
According to websites theorg.com and marketscreener.com, director Kenneth 'Buzz' West was the chairman at CannaGrow Biosciences. West was the Chairman of the European Wealth Group Limited, a Guernsey based Wealth Management business, this was at the same time as he was involved in CannaGrow. When looking at West's background, his involvement with CannaGrow does appear somewhat strange.
Bruno Bailavoine
Bailavoine we believe is actually Bruno Baillavoine. He is the Managing Director of Pericles Group UK Ltd. He is also a managing director or board member of a number of other companies including Gratomic Inc, Seton Services Ltd and Monty-C Limited.
Mordechai Gross
Gross is a Israeli located in Israel. We have been unable to confirm his identity.
There is a possibility that the above had invested in CannaGrow but according to companies house, they did not receive any shares in return from Canna Grow Biosciences Ltd. All three directors have since resigned from the company, Gross in June 2020, West in January 2021 and Baillavoine in August 2021.
Company Accounts
Since the contracts awards CannaGrow Biosciences have published two sets of accounts on Companies House and have gone into liquidation.
Balance Sheet to 31st October 2020
Assets show as a negative for £785,165.
The company was carrying a large amount of stock, valued at £2,832,44.
A healthy amount of Cash at bank/in hand £1,258,385.
Debtors £418,590 (other debtors of £370,00, likely included non-limited subsidiary of CannaGrow called Reserve Nature, this business supplied CBD oil and the business Facebook page included many posts by David Extance).
There was a significant amount owed to creditors with of over £5.4 million, the bulk of this (£4.7 million) was owed to trade creditors.
It would seem unclear how the company could continue to trade with a negative balance sheet, of which the sole shareholder David Extance would be responsible for covering.
Since the contracts awards CannaGrow Biosciences have published two sets of accounts on Companies House and have gone into liquidation.
Balance Sheet to 31st October 2020
Assets show as a negative for £785,165.
The company was carrying a large amount of stock, valued at £2,832,44.
A healthy amount of Cash at bank/in hand £1,258,385.
Debtors £418,590 (other debtors of £370,00, likely included non-limited subsidiary of CannaGrow called Reserve Nature, this business supplied CBD oil and the business Facebook page included many posts by David Extance).
There was a significant amount owed to creditors with of over £5.4 million, the bulk of this (£4.7 million) was owed to trade creditors.
It would seem unclear how the company could continue to trade with a negative balance sheet, of which the sole shareholder David Extance would be responsible for covering.
Balance Sheet 31st October 2021 (added to Companies House on 11th May 2023)
Assets show as a negative £4,498,391.
The stock value had reduced to just £40,000 (a reduction of almost £2.8 million).
The cash at the bank/in hand and reduced to £161,327 (a reduction of almost £1.1 million).
Debtors had increased to £679,359 (other debtors had increased to over £675,000, with a footnote that debtor Reserve Nature had been dissolved on 31st Jan 2023).
Creditors had remained relatively stable with just shy of £5.4 million owed, predominantly to trade creditors (£5.1 million).
There is no detail showing how the company was able to continue trading at this point.
Assets show as a negative £4,498,391.
The stock value had reduced to just £40,000 (a reduction of almost £2.8 million).
The cash at the bank/in hand and reduced to £161,327 (a reduction of almost £1.1 million).
Debtors had increased to £679,359 (other debtors had increased to over £675,000, with a footnote that debtor Reserve Nature had been dissolved on 31st Jan 2023).
Creditors had remained relatively stable with just shy of £5.4 million owed, predominantly to trade creditors (£5.1 million).
There is no detail showing how the company was able to continue trading at this point.
Statement of Affairs (7th June 2023)
The company issued a statement of affairs in June 2023. This showed that the company summary of liabilities were over £26 million and that they did not expect to realise (to cover).
This included £24,750,000 to the Department of Health and Social Care. Which would equate to the amount spent by DHSC on the PPE from CannaGrow. There was also an amount of £1,121,427 owed to HMRC.
The company issued a statement of affairs in June 2023. This showed that the company summary of liabilities were over £26 million and that they did not expect to realise (to cover).
This included £24,750,000 to the Department of Health and Social Care. Which would equate to the amount spent by DHSC on the PPE from CannaGrow. There was also an amount of £1,121,427 owed to HMRC.
The company then issued an extraordinary resolution to wind up and appointed a voluntary liquidator. A further notice of disclaimer was added to give up interest in the lease of the property used by the company. A lease signed in January 2022 for 5 years at £25,000 per annum.
The latest liquidators statement for June 2024 (added to companies house in August), shows no recovery of any funds to meet liabilities.
The latest liquidators statement for June 2024 (added to companies house in August), shows no recovery of any funds to meet liabilities.
Other information
It is of note that since the PPE contracts were awarded by DHSC, David Extance has been involved with two other companies
Five Capital Investments (London) Limited
A company established by Mark 'Barney' Battles in August 2020, with a further five directors (David Extance, Chris Cleverly, Robin Brundle, Alex Stanbury and Nasib Piriyev) added on 29th September 2020. Quite a collection of established businessmen! The company was coded 70229 - Management consultancy activities other than financial management.
It is of note that since the PPE contracts were awarded by DHSC, David Extance has been involved with two other companies
Five Capital Investments (London) Limited
A company established by Mark 'Barney' Battles in August 2020, with a further five directors (David Extance, Chris Cleverly, Robin Brundle, Alex Stanbury and Nasib Piriyev) added on 29th September 2020. Quite a collection of established businessmen! The company was coded 70229 - Management consultancy activities other than financial management.
Mark 'Barney' Battles is a Scottish entrepreneur who founded the League of Angels, a business focused on corporate venture capital, funding and angel investment. The League of Angels website shows HRH Prince Michael of Kent as their Royal Ambassador. Membership offers access to Policy Influencers and Political Networking Events.
Chris Cleverly is a British lawyer, entrepreneur, philanthropist and businessman. He is also the cousin of James Cleverly, who has held a number of cabinet positions including Foreign Secretary and Home Secretary. James Cleverly is currently standing to be the leader of the Conservative Party.
Chris Cleverly was one of the key people behind the charity called One Voice for Freedom, where he is still a trustee. One Voice for Freedom has two other trustees, they organised fundraising for PPE during the pandemic, incorporating a company called Mask for Heroes. In fact we have evidence that CannaGrow Biosciences donated £50,000 to the fundraiser, Ligentia Group (another Covid Contract winner) donated £30,000 and Aston FX (who we can't verify but who are likely part of the the Michelle Mone connected, Aston Wealth Management Ltd) donated £22,000. Mask for Heroes Ltd incorporated in April 2020, never submitted any accounts before being dissolved. It is important to note that this is not related to charity Mask our NHS Heroes.
Chris Cleverly is a British lawyer, entrepreneur, philanthropist and businessman. He is also the cousin of James Cleverly, who has held a number of cabinet positions including Foreign Secretary and Home Secretary. James Cleverly is currently standing to be the leader of the Conservative Party.
Chris Cleverly was one of the key people behind the charity called One Voice for Freedom, where he is still a trustee. One Voice for Freedom has two other trustees, they organised fundraising for PPE during the pandemic, incorporating a company called Mask for Heroes. In fact we have evidence that CannaGrow Biosciences donated £50,000 to the fundraiser, Ligentia Group (another Covid Contract winner) donated £30,000 and Aston FX (who we can't verify but who are likely part of the the Michelle Mone connected, Aston Wealth Management Ltd) donated £22,000. Mask for Heroes Ltd incorporated in April 2020, never submitted any accounts before being dissolved. It is important to note that this is not related to charity Mask our NHS Heroes.
Robin Brundle, is an established businessman, Chair of Technology Minerals PLC. He is also a racing driver and the younger brother of F1 commentator and ex driver Martin Brundle.
Nasib Piriyev, is an Azerbaijani entrepreneur and philanthropist. He is the CEO of AzMeCo and PNN Group, which he founded along with his father in 1994. He also established Woodford Finance last year alongside Baron Woolley of Woodford. He has appeared in the media stores before with ties to Tony Blair & Prince Andrew.
Alex Stanbury, is the CEO of Technology Minerals PLC. Brother of reality star Caroline.
It would appear on the surface that David Extance moved into an influential circle following the PPE contracts. He resigned as a director in January 2022 and is no longer a shareholder in the company.
Nasib Piriyev, is an Azerbaijani entrepreneur and philanthropist. He is the CEO of AzMeCo and PNN Group, which he founded along with his father in 1994. He also established Woodford Finance last year alongside Baron Woolley of Woodford. He has appeared in the media stores before with ties to Tony Blair & Prince Andrew.
Alex Stanbury, is the CEO of Technology Minerals PLC. Brother of reality star Caroline.
It would appear on the surface that David Extance moved into an influential circle following the PPE contracts. He resigned as a director in January 2022 and is no longer a shareholder in the company.
On with the Show Limited
Incorporated on 17th January 2024, with Extance as the sole shareholder. The company would appear to manage bands.
Incorporated on 17th January 2024, with Extance as the sole shareholder. The company would appear to manage bands.
Summary and Questions
In summary our investigation would confirm concerns around how a small CBD oil manufacturer/supplier with only £6k in assets ended up being awarded PPE contracts for £33 million. The structure of the company at the time involved a number of directors that would appear at odds with both the size of the business and the sector that the business operated in. The company owner David Extance was an advisor to an All Party Political Group and therefore potentially had access to a number of different MP's and Lords.
The fact that the DHSC then ended up chasing for a refund of almost £25 million would raise questions around their due diligence prior to the contract award. That the company is now in liquidation with no funds would suggest any financial recovery is very unlikely.
The questions we would be asking if we were the soon to be appointed Covid Commissioner are as follows:
We are at no point suggesting any wrongdoing by any of the people named.
Finally it will be interesting to see what the Covid Commissioner uncovers!
In summary our investigation would confirm concerns around how a small CBD oil manufacturer/supplier with only £6k in assets ended up being awarded PPE contracts for £33 million. The structure of the company at the time involved a number of directors that would appear at odds with both the size of the business and the sector that the business operated in. The company owner David Extance was an advisor to an All Party Political Group and therefore potentially had access to a number of different MP's and Lords.
The fact that the DHSC then ended up chasing for a refund of almost £25 million would raise questions around their due diligence prior to the contract award. That the company is now in liquidation with no funds would suggest any financial recovery is very unlikely.
The questions we would be asking if we were the soon to be appointed Covid Commissioner are as follows:
- Where did the offer from CannaGrow Biosciences originate from?
- What checks were made on the financial stability/ability of the company to deliver the masks?
- Were any checks carried out on the directors involved?
- Who signed off the contract?
- When and what quality checks were made on the facemasks?
- Where did the £25 million go? How much was paid to the manufacturer?
- What paperwork existed between CannaGrow and the manufacturer?
- Can anything be recovered from the manufacturer?
- How could CannaGrow afford a £50,000 donation?
- How did David Extance get involved in Five Capital Investments (London) Ltd?
- Did David Extance know any other of the directors of Five Capital Investments (London) Ltd prior to the Covid?
We are at no point suggesting any wrongdoing by any of the people named.
Finally it will be interesting to see what the Covid Commissioner uncovers!
