Report lists 'series of errors'

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The Industrial Development Board contravened its own procedures when it gave millions of pounds to a failed company, the Audit Office has said.

The firm, Valence Technology, received £15m of government assistance before it pulled out of Northern Ireland and relocated its operations to China.

The company was supposed to set up a plant in Mallusk making lithium batteries, employing 660 people.

However, it fell significantly short of its expected job and investment levels.

An Audit Office report has listed a series of errors which, it said, called into question the IDB's decision to give the American-owned company money.

One of the key lessons of the De Lorean report was ignored - the company was not properly assessed.

'Best endeavours'

According to the Audit Office, the IDB appeared to have limited regard for its own guidance of high risk projects, and failed to meet its own guidelines.

At one stage an interim target of 175 employees was set but, the IDB accepted that an employment level of just five workers represented the company's "best endeavours" and went ahead and released grant money accordingly.

In all, Valence Technology was given £15m in assistance before it relocated to China in 2003.

The company was first offered government grants in 1993.

The IDB did manage to claw back some £5m.

Much of that came from the proceeds of the sale of the factory - an asset which the IDB had provided for the company.

A spokesman from Invest NI, which was formerly the IDB, said lessons in the report would be "relevant to future inward investment projects"'.

"It is possible that the report will be considered by the Public Accounts Committee at a future evidence session and it would therefore be inappropriate to comment further at this stage," he said.