Firm of former UK envoy on ethics made £13m on 'not for profit' contract

An entrepreneur who represented the UK on an ethics body was asked to resign from a company running government visa services after officials found it made a £13.6m gain on its not-for-profit contract.

- Daniel Boffey

After the discovery of years of profit-making, Ecctis, which runs language tests and qualification recognition for people applying for UK visas, repaid the cash to the government and some executives, including Cloud Bai-Yun, stood down from the firm.

Ecctis was accused of being in breach of its contract for failing to reinvest its large profits into the language test service as it was required to do under a deal first signed with the government in 2014.

The payment of dividends to Ecctis's parent firm from its reserves was also criticised, as was the allocation to the government contract of management fees of as much as £85,000 a quarter paid to Bai-Yun - its chief executive in the relevant period.

Parliament has not been informed about what the Department for Education admitted in a statement were "serious" failings discovered last year.

Ecctis's contracts with the DfE and Home Office were recently renewed with tightened provisions.

A whistleblower questioned why the monopoly services had been put in the hands of a private company.

They told the Guardian: "I believe this is a tale of corporate greed and Whitehall mismanagement."