A company that bungled a £250m contract for protective equipment from the government has seen its profits increase by more than 2,600%.

Ayanda Capital won the deal last year, after it was brokered by the company’s senior adviser, Andrew Mills, who was also an adviser for the government’s Board of Trade, chaired by Liz Truss, at the time.

The government later admitted that 50 million masks supplied by the company could not be used by the NHS, because they had the wrong type of straps. Ayanda blamed government officials for the mistake, claiming it supplied masks to the specification agreed.

Accounts now reveal that Ayanda Capital made profits of more than £17m last year – up from just £633,000 the year before.

Overall, turnover also rocketed by more than 53,000%, from less than half a million in 2019 to £247m in 2020.

The company’s PPE contract was one of several to be criticised by the National Audit Office last year, which said deals were handed out without proper oversight.

It said that firms with political connections were directed to a ‘high-priority’ channel, where bids were ten times more likely to be successful.

Records show Ayanda’s £250m deal was pushed through a ‘VIP lane’ before winning the contract. An email about the company was marked “URGENT VIP CASE” and “VERY URGENT VIP ESCALATION” by government officials. 

One official wrote that, if the deal fell through, “Andrew will escalate as high as he can possibly go!”

Mills has previously taken steps to avoid his own earnings from being made public, saying that his family “value our privacy”.

Ayanda is one of a number of companies at the centre of legal action by the campaign groups Good Law Project and EveryDoctor, which claim that contracts were awarded unlawfully.

Good Law Project has reported that government lawyers have admitted they planned to enter a contract with a “£100 company wholly owned by Liz Truss’ adviser Andrew Mills and his wife”. It said Mills asked that Ayanda Capital be used instead, because the other company didn’t have “international payment infrastructure”.

The director of Good Law Project, Jolyon Maugham, said today: “The pandemic was certainly lucky for some – even those supplying facemasks the NHS couldn't use. 

“But one can only guess how large a fortune Andrew Mills made – he has changed the legal status of his companies so that we can't see how much public money went into his pocket.”

Previous accounts of Ayanda, which is run by former investment banker Tim Horlick, say the company is controlled via a holding company registered in the tax haven of Mauritius. 

Mills said he was asked by Horlick to assist the company with securing the contract because of his relationship with the trade department. But Horlick has insisted there was "no chumocracy" involved in the deal.

“There was no cronyism involved in the award of the contract,” he told ITV News. “It went through a proper procurement process.”

Ayanda Capital previously said in a statement that the masks it supplied to the NHS “went through a rigorous technical assurance programme and all the requirements of the technical specifications which were made available online through the government’s portal”.

The government has faced accusations of cronyism after several lucrative contracts related to the pandemic were found to have been handed out without competitive tender to companies linked to the Conservative Party. 

Last month, openDemocracy found that another firm, Meller Designs, had also made record profits after being placed on the ‘VIP lane’ for COVID contracts.

Previously co-owned by a prominent Tory donor, David Meller, it was awarded £160m in deals to provide PPE, all without competitive tender.

openDemocracy also revealed that a PR firm run by close associates of Conservative minister Michael Gove was awarded a £560,000 deal to hold focus groups on the government’s health messaging. A court later ruled that the deal was “unlawful” and “gave rise to apparent bias”, because it was awarded without competitive tender.  

A healthcare firm ultimately controlled by Lord Ashcroft, a Tory donor and former party chairman, also received a £350m COVID contract.

A report by Transparency International found that the government’s fast-tracking of ‘VIP’ suppliers may have led to “systematic and partisan bias”.