Shareholders of firm backed by Matt Hancock have donated to the Tories

Matt Hancock has promoted a healthcare startup whose shareholders have made donations to the health secretary and the Conservative party, the Guardian can reveal.

The revelations about investors in Babylon Healthcare, a startup that offers smartphone-based NHS GP consultations and symptom-checker services, raise questions about possible conflicts of interest for Hancock.

Babylon, a company founded in 2013 by the British-Iranian former banker Ali Parsa, is in the process of a listing in the US, which is expected to value the company at $4.2bn (£3bn).

Hancock has repeatedly endorsed Babylon’s products publicly, and said he wants everyone in England to have access to them.

An investigation by the Guardian, the BBC’s File on 4 and SourceMaterial has established that shareholders in the company have included companies owned by two donors to the Conservatives, as well as an adviser on artificial intelligence appointed by Hancock.

While it has operations in several countries, much of Babylon’s success has been rooted in the UK, where it runs the GP at Hand app, offering rapid consultations for NHS patients who register with it as their GP. Its NHS service was launched in London in 2017 and has since been expanded to Birmingham, with around 100,000 patients now enrolled.

However, GP at Hand has attracted controversy. Some GPs have complained that it attracts younger, healthier patients who are cheapest to treat, leaving other GP practices with more complex cases.

Dominic Cummings acted as a consultant to Babylon on communications and personnel in 2018. Since departing Downing Street, Cummings – who did not respond to a request for comment – is understood to have been back working with Parsa.

The numerous links between Babylon and Tory figures and donors raise questions about possible conflicts of interest for Hancock, who has been an enthusiastic supporter of the company’s technology.

Shortly after becoming health secretary in July 2018, he told the House of Commons that he was a user of GP at Hand and that it was his personal GP. A few weeks later Hancock told the Daily Telegraph that “GP at Hand is revolutionary … I want to see it available to all, not based on their postcode.”

That same month, September 2018, Hancock went to an event to mark an investment round of $100m at Babylon’s London offices. A couple of months later Hancock gave an interview to the Evening Standard for a supplement sponsored by Babylon, in which he endorsed GP at Hand again.

One of Babylon’s significant financial backers is the Egyptian billionaire Nassef Sawiris, who also has stakes in Adidas and Aston Villa football club. A company he controls, OCI UK, donated £200,000 to the Tory party between 2017 and 2018. His shareholding in Babylon is held by another company he controls called NNS Holding. Sawiris did not respond to requests for comment.

Another Tory-linked backer of Babylon is the financier Ian Osborne, an informal adviser to David Cameron at the time of the 2010 election. Osborne was a shareholder in Babylon via his firm Longsutton until 2019, but has since exited his investment in the startup.

Osborne made a donation of £10,000 to Hancock’s Tory leadership campaign in 2019 via a subsidiary company, Connaught International. The Connaught donation is acknowledged in the health secretary’s declaration of financial interests.

Osborne said he had not donated to the Tory party, had no active dealings with Babylon and had never encouraged Hancock to endorse Babylon, adding that to suggest the political donation to him was linked to Babylon would be misconceived.

A third Babylon shareholder until 2019 with connections to Hancock is Demis Hassabis, a co-founder of the London-based artificial intelligence firm DeepMind, which was acquired by Google in 2014. Hassabis was made a government adviser on AI by Hancock while he was secretary of state at the Department for Culture, Media and Sport in 2018.

Hassabis has also exited his investment in Babylon. A spokesperson said he was an early angel investor in the company but had no active role in it and had never had any discussions with the NHS, Hancock or any part of UK government about Babylon. There was no link between his passive investment in Babylon and his role as adviser on AI, she added.

Sir Alistair Graham, the chair of the Committee on Standards in Public Life from 2004 to 2007, said an investigation should be launched by the relevant authorities to establish if, following donations, Hancock’s public endorsements of Babylon and its services constituted a conflict of interest and a breach of the ministerial code.

Graham said Hancock should have explained the Tory links to Babylon Healthcare when promoting the firm.

A source close to Hancock said the health secretary supported digital innovation, so it was not surprising that he talked about telemedicine services for the NHS. He rejected any suggestion he had acted improperly. Hancock does not know Sawiris, the source added.

Lawyers for Babylon said the company had never made political donations and that any political donations made by a few of its many shareholders were not linked to the firm’s success. They added that Babylon had no control or knowledge of donations to political parties or MPs made by shareholders.

They said Babylon had not benefited from special treatment, saying its innovative and highly valued service was the reason for its success. This service had understandably led to praise and interest from politicians across the political spectrum, the lawyers added, insisting there was no basis to attribute Babylon’s achievements to political donations by third parties.

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