The independent peer Lord Darzi, a senior adviser to the government on the NHS, failed to officially declare shareholdings in healthcare companies worth hundreds of thousands of pounds.

Ara Darzi is an eminent surgeon and professor at Imperial College London whose report on the NHS for the government in September informed the decision announced last week by the health secretary, Wes Streeting, to abolish NHS England. Darzi also has an extensive portfolio of private interests in commercial medical companies.

A Guardian investigation has found Darzi held shares and share options in four healthcare companies that he did not declare on his House of Lords register of interests. The information was missing from the register when Streeting appointed him to lead the investigation into the state of the health service.

Lawyers for Darzi said the omission was an “oversight”, and that some of the information had been publicly available in US stock market filings. They said he had written to the registrar of Lords interests to request his entry be corrected.

The undeclared interests include $500,000 of shares and $800,000 of share options in Evelo Biosciences, a US-based healthcare venture where Darzi was a director. The shares were bought in 2022 and Darzi held them until June 2023, according to his now corrected register. Darzi’s lawyers said he had never obtained benefit from the share options as he never converted them into shares.

The Lords rules require peers, as lifelong members of the UK parliament, to be transparent about their commercial interests. Until September 2023, all shares or share options worth more than £50,000 were declarable. The threshold then rose to £100,000.

Darzi’s share options in Evelo were above the registrable value for five years, from the start of his directorship in 2018, when his first remuneration package was $27,438 in fees, and $458,202 in share options, to June 2023 when he says his interest ended.

Darzi resigned from the Evelo board in 2022, and the company went into liquidation last year.

Evelo was a start-up backed by a US venture capital group, Flagship Pioneering, where Darzi has a paid role as chair of the “health security initiative” of its UK arm. Flagship was an early backer of Moderna, which became a multibillion-dollar company after its Covid vaccine sold around the world.

Darzi declares on the register that he is a director at three other companies backed by Flagship: Montai Health Inc, a molecular nutrition company; Harbinger Health, focusing on early cancer detection; and YourBio Health Inc, which has created a blood testing device that can be sold direct to the public.

Unlike Evelo, these companies are not listed on any stock market, which means details about shareholders are not publicly available.

Asked whether he had a financial interest in the three companies, lawyers for Darzi said he did. They said he held share options in all three companies above the £100,000 registrable value, and a holding of shares in Montai Health Inc since January 2022, also above the value requiring them to be registered. Share options give the holder the right to buy shares at a fixed price, and are usually converted into shares by the holder when their value rises above the fixed price.

Dr Jonathan Rose, a political integrity expert at De Montfort University, said: “Breaches of the rules are corrosive to the trust that the public should be able to have in parliament. Given that the House of Lords specifically wants people with outside interests to use their knowledge for the public good, and given that people are appointed for life and can’t be removed by elections, it is critical that the rules are followed in full.”

Darzi was appointed to the Lords and made a junior health minister by Gordon Brown in 2007. He led a review of the NHS for the Labour government at that time. Darzi was a non-executive director of NHS England from 2020 to 2022, and he currently chairs the NHS Accelerated Access Collaborative (AAC), which negotiates deals with healthcare and life science businesses.

His “rapid investigation” into the NHS for Streeting produced a report in September that found the NHS to be in “serious trouble”, and was highly critical of the Conservative government’s years of austerity and the 2012 reorganisation which produced NHS England. The report recommended a series of changes, including a “major tilt towards technology”, saying: “There is enormous potential … for life sciences breakthroughs to create new treatments.”

Darzi’s lawyers told the Guardian the AAC role was explicitly a collaboration between the NHS and the life sciences industry, and he did not have a conflict of interest between his public roles and his directorships and share interests in private healthcare businesses. They disclosed he took a “leave of absence” from his paid role at Flagship Pioneering while he led the NHS review.

They said: “Before accepting the appointment … our client disclosed his personal interests to [Streeting] (by sharing his House of Lords register of interests) and took a leave of absence from his position at Flagship while he was undertaking the NHS investigation and was not paid during this time. This was entirely at our client’s own behest and specifically to ensure that there could be no perceived conflict of interest.”

A Department of Health and Social Care spokesperson said: “Lord Darzi is a world-renowned cancer surgeon who has dedicated more than three decades of his life to the NHS and medical innovation.

“All relevant due diligence processes were followed.”

Darzi’s lawyers said he had not realised peers were required to register share options, and that his failure to do so was “an oversight”. He acknowledged that he should have declared them, and his shareholding in Montai.

“Lord Darzi has devoted his life to the advancement of medicine and scientific discovery, and over the course of this he has worked both with government and industry to improve the health system and support the life sciences sectors in this country. He has gone to great lengths to ensure that there have not been conflicts of interests, perceived or otherwise,” the lawyers said.

“It has recently been brought to Lord Darzi’s attention that the share options he was granted as part of his role as director of Evelo, Montai Therapeutics, Harbinger Health and YourBio Health and his subsequent personal investment to support Evelo and Montai Therapeutics’s scientific research exceeded the reportable threshold for the House of Lords register. He has acted immediately to rectify this oversight and update the entry on the register. Lord Darzi is very grateful to the Guardian for helping bring this oversight to light.”