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Financial firm asked to repay £700,000 Welsh government aid | Financial firm asked to repay £700,000 Welsh government aid |
(about 3 hours later) | |
A financial company which left Wales a year after setting up has been asked to repay £700,000 of public funds. | A financial company which left Wales a year after setting up has been asked to repay £700,000 of public funds. |
Guardian Wealth Management closed its Caerphilly office in June 2014 blaming low demand for a financial product aimed at the Muslim community. | Guardian Wealth Management closed its Caerphilly office in June 2014 blaming low demand for a financial product aimed at the Muslim community. |
The firm said it would repay around half of its Welsh government grant aid. | The firm said it would repay around half of its Welsh government grant aid. |
Ministers already facing questions over the collapse of a Cwmbran financial services firm given £600,000 said they had to take "managed risk". | Ministers already facing questions over the collapse of a Cwmbran financial services firm given £600,000 said they had to take "managed risk". |
However, the Federation of Small Businesses has questioned the policy of backing "low level" financial companies. | However, the Federation of Small Businesses has questioned the policy of backing "low level" financial companies. |
Negotiations | Negotiations |
Doncaster-based Guardian Wealth Management originally planned to open an office in Llantrisant, Rhondda Cynon Taff, but eventually set up in Caerphilly. | Doncaster-based Guardian Wealth Management originally planned to open an office in Llantrisant, Rhondda Cynon Taff, but eventually set up in Caerphilly. |
A Welsh government spokesman said: "A first payment of around £700,000 was made to Guardian Wealth Management in March 2013 when the firm had met our targets for jobs created. | |
"Those staff were subsequently absorbed into other parts of the group when Guardian Wealth Management later decided to relocate to premises outside Wales. | "Those staff were subsequently absorbed into other parts of the group when Guardian Wealth Management later decided to relocate to premises outside Wales. |
"We are in negotiations with the company to recover the grant paid." | "We are in negotiations with the company to recover the grant paid." |
A number of firms backed by Welsh government grants have subsequently closed. | |
In July, another financial services firm - Griffin Place Communications Ltd in Cwmbran - went into liquidation with the loss of 140 jobs, having received £600,000 in 2014. Bridgend-based finance technology company Ideoba - backed by £176,000 of grant aid - closed in April. | |
And in June, it was revealed Cardiff-based financial services firm, Open Resolution, had gone into liquidation without collecting a promised £250,000 grant from the Welsh government. | And in June, it was revealed Cardiff-based financial services firm, Open Resolution, had gone into liquidation without collecting a promised £250,000 grant from the Welsh government. |
Iestyn Davies, from the Federation of Small Businesses in Wales, said: "Trying to pick winners has proved problematic over many years. | Iestyn Davies, from the Federation of Small Businesses in Wales, said: "Trying to pick winners has proved problematic over many years. |
"The government has to have an appetite for risk but you have to ask whether the due diligence is being done." | "The government has to have an appetite for risk but you have to ask whether the due diligence is being done." |
The Welsh government said: "Full due diligence is always carried out before we offer any financial support - however there are occasions when businesses are not successful. | The Welsh government said: "Full due diligence is always carried out before we offer any financial support - however there are occasions when businesses are not successful. |
"As a pro-business government we must be prepared to take managed risk to meet our economic objectives and create jobs." | "As a pro-business government we must be prepared to take managed risk to meet our economic objectives and create jobs." |
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