The Australian government entered a contract to buy 500,000 Covid-19 test kits from a company headed by a convicted rapist, which had no experience in medical diagnostics, failed to deliver shipments at a critical point in the pandemic, and is now under investigation by the medical regulator.
At the height of the crisis, a small, largely unknown Brisbane company, Promedical Equipment Pty Ltd, told the Australian government it could supply huge quantities of Covid-19 rapid antibody testing kits made by a relatively well-known Chinese manufacturer, Guangzhou Wondfo Biotech.
Promedical’s chief executive, Neran De Silva, was convicted of rape in 2018, and was a one-time business associate of the government services minister, Stuart Robert, through a cryotherapy treatment business. Promedical’s two shares were purchased for $2 by De Silva’s partner. Before the pandemic it sold cryogenic, massage therapy and erectile dysfunction machines.
The Chinese-made Covid-19 testing kit it was offering to sell the Australian government was already approved for use in both Australia and the US. Promedical was effectively acting as a distributor.
The Guardian can reveal the Australian government signed a contract with Promedical to supply it with 500,000 antibody testing kits in March, as it urgently attempted to boost its capacity to screen for Covid-19.
Promedical and its representatives were on a media blitz about the same time, telling The Today Show, the Daily Telegraph, the Daily Mail and Sky News it could supply 5m tests to Australia every week, an announcement heralded as “revolutionary” and “amazing”.
But the deal between Promedical and its Chinese manufacturer broke down in acrimonious fashion.
Wondfo effectively disowned the Brisbane company, revoking authorisation to distribute its products in early April.
Promedical has not delivered any of the Wondfo tests, the government said, nor had they been paid for. A health department spokeswoman said its contract with Promedical stipulated it would only be paid once the tests were received. No money had been given to Promedical, she said.
“The contract was for payment on delivery and acceptance of the testing kits. On 3 April, the department was advised that the Chinese manufacturer Wondfu had withdrawn its permission for Promedical to distribute their device,” she said.
“To date, the tests have not arrived in Australia and no payment has been made.”
Promedical blamed Wondfo and claimed the manufacturer was “unable to meet order quantities by the deadlines specified”.
“Promedical continued to secure orders with government bodies for quantities far larger than those Wondfo could produce within the tight timeframe,” a spokeswoman said.
“On 3 April 2020, it was evident Wondfo could not supply the required quantities of its Covid-19 IgG Rapid Detection Kit to fill Promedical’s Australian government [order].”
Promedical says it is planning to supply its own branded Covid-19 testing kits to the government. But that test does not appear on the Therapeutic Goods Administration’s list of approved Covid-19 tests.
A Promedical spokeswoman said the government had been “made aware of changes to the delivery timeline as a result of the changes to supplier”.
The company said it had received assurances from the Australian government that it would proceed with the contract.
“Promedical’s contact with the Australian government has confirmed that, as long as Promedical’s Covid-19 IgM/IgG Rapid Detection Kit is included in the TGA’s [Australian register of therapeutic goods], they will continue with the order and quantities, in line with an updated contract,” a Promedical spokeswoman said.
The government has cast serious doubt on that claim. A health department spokeswoman said: “No further action is being taken by the department in regard to the contract for any new or additional testing kits that may be sourced by Promedical.”
The Guardian has previously revealed that the TGA is investigating Promedical’s actions.
Even when its deal with Wondfo broke down, it continued to falsely claim in promotional material that the Covid-19 testing kits it was selling had Australian and US regulatory approval.
Promedical told the Guardian it had now “updated” its communications “to provide further clarification for buyers”.
The pandemic has put huge pressure on governments to urgently approve medical devices to boost testing capacity amid unprecedented demand.
In Australia, the TGA is treating requests for approval with urgency and then conducting post-market surveillance to ensure they are accurate and reliable.
The medical regulator says “any Australian-based legal entity may be the sponsor of a medical device”, provided it can fulfil legislative requirements, including being able to demonstrate adequate safety and performance.
When Promedical was asked whether it had any prior experience in medical diagnostics, a spokeswoman said the pandemic had seen businesses “all over the world adapt and innovate like never before”.
“When Covid-19 entered Australia, Promedical immediately began looking for the best solution to stop its spread; finding a way to speed up the testing and reporting process,” she said.
It also said it worked closely with regulatory bodies, including the TGA, and followed strict guidelines.
The type of antibody testing offered by Promedical is generally used to supplement the primary form of Covid-19 testing, which examines genetic material in laboratories.
Antibody testing is designed as a method of rapid screening, and experts say it has some utility in the response to the pandemic, but should not be relied upon as the sole diagnostic tool.
Peter Collignon, an infectious diseases expert at the Australian National University, has previously told the Guardian the government must take care to prevent inaccurate antibody tests coming on to the market, despite the urgency of the crisis.
