US banker paid £73m dividend in 2021 after firm won millions in UK Covid contracts
An American banker was paid a £73m dividend in 2021 after his firm won hundreds of millions in Covid contracts, figures show.
Banks Bourne, the sole owner of the medical company Tanner Pharma, took the sum from Tanner’s UK division, Companies House records show.
While Tanner Pharma, based in Charlotte, North Carolina, registered profits of £1.4m in 2019, this figure hit £38.8m in 2020 and £64m in 2021. According to the company’s latest accounts, released in March, this financial growth was largely driven by a Covid windfall, with the firm paid huge sums by the UK government.
Turnover increased from £192m in 2020 to £468.5m in 2021, or by 144%, the latest accounts state. They say “this increase was largely the result of higher-volume contracts” with the UK Health Security Agency (UKHSA) as the company “supported the UK government’s urgent response to Sars-CoV-2 pandemic”.
Tanner Pharma’s profit margin therefore was 19.8% in 2020 and 13.7% in 2021.
Government records show that in 2020 and 2021 Tanner Pharma was awarded contracts worth £865m from the UKHSA and the DHSC for the provision of lateral flow tests. The largest contract during this period was valued at up to £243m – more than 84 times the firm’s total turnover of £2.9m in 2019.
The company’s accounts show that it earned 98.3% of its turnover in 2021 and 93.7% in 2020 from the UK government.
Tanner Pharma continued to be awarded UK Covid contracts in 2022, with its largest single contract coming in February 2022, worth up to £595m for the provision of lateral flow tests to the UKHSA. In total, the firm was awarded UK Covid contracts worth just shy of £1.5bn – the fourth largest total of any firm.
The firm’s 23 employees were paid an average of £248,521 in 2021, up from £213,500 in 2020 and £84,110 in 2019. It does not appear that Bourne took a dividend from Tanner Pharma in 2020.
The government has been faced with repeated accusations of misspending in its awarding of Covid contracts, with parliament’s public accounts committee saying that the government lost and risked “unacceptable” billions of taxpayers’ money in its Covid response.
The Liberal Democrat health spokesperson, Daisy Cooper, said: “These profits raise more serious questions about the government’s inability to get good value for taxpayers’ money.
“It is now critical that these contracts are scrutinised as part of the Covid inquiry.”
Tanner Pharma acted as a supplier of lateral flow tests on behalf of several key government suppliers. The government revealed in June 2021 that Tanner was distributing lateral flow tests on behalf of Orient Gene, based in Zhejiang, China.
None of these firms were part of the UK Rapid Test Consortium, an industry group formed to help increase the government’s procurement of lateral flow tests. The Good Law Project previously revealed that Tanner Pharma had supplied some tests that were unusable, but the value of these tests and the reason they could not be used is unknown.
There have been numerous controversies surrounding the sums of money afforded to middle-men and facilitators during the Covid procurement process – not least the payment of more than £21m in taxpayers’ money to a Spanish middleman who helped in the sale of personal protective equipment to the UK government by a Florida-based jewellery designer.
There was also criticism of the government’s rapid testing programme, with the NAO finding that the Department of Health and Social Care (DHSC) wasted £5.8bn on lateral flow tests and PCR tests procured by the test-and-trace programme.
Bourne is the founder and chief executive of Bourne Partners, a “financial services firm specialising in the pharma, pharma services and consumer health sectors” that invests in companies as well as advising on acquisitions and external financing. He was previously the vice-president of Wachovia Securities, a bank bought by Wells Fargo for $15.1bn (£12.1bn) in 2008.
Bourne says he has “invested in more than 200 private companies/assets since 2000”, and is described on his LinkedIn page as the founder and chair of Tanner Pharma stretching back to 2003.
A Tanner Pharma UK spokesperson said: “Tanner Pharma UK Limited was contracted by the DHSC to distribute Orient Gene lateral flow Covid-19 tests for use in the United Kingdom, requiring additional investment in expanding our operations and distribution channels.
“These tests were among a minority to be evaluated at Porton Down as having both very high specificity and very high sensitivity against viral loads associated with infectiousness. We are proud to have successfully delivered over 480 million reliable and accurate testing kits as part of the emergency response to the pandemic.”