The lateral flow tycoons. How a small UK company (property agency and shoe retailer), went from being indebted to £3,500 to a profit of £20M

Thanks to its role in the largest ever government Covid deal, a tiny British company saw its value rise from zero to over £20million per year.

  • UK company run by a shoe seller and property agent made £20m profit through Covid role
  • Disruptive nanotechnology Limited was nothing before the pandemic
  • The bank had only £85 and a staggering debt of nearly £4,000.
  • A year later, in 2020, it had made £20m profits and had £18m cash

Disruptive Nanotechnology Ltd was jointly owned by London chartered Surveyor Charles Palmer and Northamptonshire Shoe Retailer Kim Thonger. At the end of 2019, it was worth nothing – with debts totalling £3,592 as well as just £85 in the bank.

According to Companies House documents, it made profits of £20.5million and had £18million in cash.

These two men, who are the sole employees of the company, had no prior health experience. They helped Innova Medical Group, a US-based company, win nine British contracts for lateral flow testing. This was the largest number of deals with any private company during the pandemic.

Innova is responsible for nearly half of the £7.4billion spent home on Covid testing and it remains the mainstay of Britain’s testing system – even though the Daily Mail reported last January that the US Food and Drug Administration had rejected the firm’s side flow tests.

It immediately recalled Innova’s tests from last year and advised people to dispose of them in the trash. They are not being used across the Atlantic.

Innova’s UK spokesperson confirmed that tests sold to Britain are the same type, but maintained they were effective and met British requirements.

However, experts in the UK have questioned the quality and reliability of the Chinese-made tests.

They wrote in the British Medical Journal last summer that the test failed to detect infection in 60% of patients, and in 30% of those with extremely high viral loads, which was of great concern.

Official UK tests showed only 58% accuracy when people were swabbed or tested by themselves. However, there were much better results for viral loads.

British companies have complained that they are being forced to export their tests overseas because they haven’t been approved by the UK regulatory authorities.

Innova and its parent company were able to purchase two Gulfstream private planes for £48 million with the assistance of the British taxpayer.

According to the Los Angeles Times, Innova’s chief executive Daniel Elliott spent £3million in October 2020 on a six-bedroom mansion that included a sauna, wine cellar, and cinema.

Charles Huang, 57 years old, is the founder of Innova, one of the largest global testing companies. He was a Chinese American who studied in Wuhan, the city where the pandemic started.

The Mail’s revelations are coming as the UK is facing a chronic shortage in lateral flow tests. This throws Boris Johnson’s promise to keep schools open and businesses open into chaos. Family members are performing around a 1.5milion lateral flows per day. Innova is backed in part by private equity firms. It was a start-up just before the pandemic.

This firm tapped into a testing goldmine when it purchased millions of lateral flow test kits made by a Chinese company, Xiamen Biotime Biotechnology. It did this before the pandemic.

Partnership with Mr Palmer and Mister Thonger was key to securing deals with the British government.

Innova’s spokesperson told Mail 2020 that in order to secure government contracts, “you need to find someone with connections” and that Mr Thonger had introduced Mr Palmer to Innova to help them negotiate the UK test evaluation process.

Their firm was receiving ‘a few pennies’ for each test sold, but this sum is now in the tens of thousands and is on the rise. Last week’s accounts with Companies House only covered 2020, when Innova negotiated £978million contracts. This figure has since risen to £3.7billion. Disruptive Nanotechnology is expected to continue growing.

Prior to the pandemic, Thonger, a Cardiff University grad, held senior positions at Dune and DKNY, as well as bootmaker Dr Martens. Mr Palmer owns his own agency for commercial property.

Mr Palmer refused to disclose the exact value of the deals to Mr Thonger and Mr Palmer on the ground that it was commercially sensitive.

He stated that he was central to the pandemic effort and had saved thousands of lives. He claimed he was still living in the house and was driving the same car as before the pandemic. Thonger declined to comment.

Dr Huang completed a masters degree and a PhD at Strathclyde University. He thanked the institution last year with a £50million donation. Innova was developed by Dr Huang from Pasaca Capital, an investment firm that he started in 2016.

According to the UK Health Security Agency, all tests are subject to rigorous evaluations. When Innova was asked about claims that the US regulator had made its tests too sensitive, Innova replied that they were certified by UK authorities.

Disruptive Nanotechnology’s spokesperson stated that the company ‘provides goods or services to hundreds of customers, in many different sectors.

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