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Legal action over £663,000 grant | Legal action over £663,000 grant |
(10 minutes later) | |
The Welsh Assembly Government is to take legal action to recover hundreds of thousands of pounds from a firm that made 115 people redundant last year. | The Welsh Assembly Government is to take legal action to recover hundreds of thousands of pounds from a firm that made 115 people redundant last year. |
Dairygold Food Products has faced calls to repay the £663,528 grant after it closed its cheese packing plant at Felinfach, Ceredigion, in April 2006. | Dairygold Food Products has faced calls to repay the £663,528 grant after it closed its cheese packing plant at Felinfach, Ceredigion, in April 2006. |
The Irish firm was awarded the money in 2002 to expand its packing lines. | The Irish firm was awarded the money in 2002 to expand its packing lines. |
Dairygold said it would defend itself "vigorously" through the courts, but had tried to resolve the issue. | |
Rural Affairs Minister Carwyn Jones has been threatening court action for months. | Rural Affairs Minister Carwyn Jones has been threatening court action for months. |
The dispute centres on funding for work to expand the plant near Lampeter, which was completed in March 2004. | The dispute centres on funding for work to expand the plant near Lampeter, which was completed in March 2004. |
They were given one final opportunity Carwyn Jones | They were given one final opportunity Carwyn Jones |
But 18 months later the firm announced plans to close its factory. | But 18 months later the firm announced plans to close its factory. |
An investigation by the BBC Radio Cymru programme, Manylu, found the machinery bought with the grant was sold on to the Kerrygold company, which is part-owned by Dairygold, and was being moved on to its packing plant in Leek, Staffordshire. | An investigation by the BBC Radio Cymru programme, Manylu, found the machinery bought with the grant was sold on to the Kerrygold company, which is part-owned by Dairygold, and was being moved on to its packing plant in Leek, Staffordshire. |
Mr Jones said there had been long-running discussions with Dairygold and the assembly government had written to the company's lawyers to notify them formally "that we were minded to start legal proceedings very soon". | Mr Jones said there had been long-running discussions with Dairygold and the assembly government had written to the company's lawyers to notify them formally "that we were minded to start legal proceedings very soon". |
Mr Jones added: "They were given one final opportunity to provide further information. | Mr Jones added: "They were given one final opportunity to provide further information. |
"A letter has since been received from Dairygold's lawyers, which basically states there is no change in their position. | "A letter has since been received from Dairygold's lawyers, which basically states there is no change in their position. |
Most of those made redundant have found new jobs | |
"The Welsh Assembly Government has, therefore, written to the company today making a formal demand for repayment of the grant, amounting to £663,528.10 together with interest." | "The Welsh Assembly Government has, therefore, written to the company today making a formal demand for repayment of the grant, amounting to £663,528.10 together with interest." |
A spokesman for Dairygold said: "We have not received notification of legal action yet, but we will defend ourselves vigorously through the legal system. | A spokesman for Dairygold said: "We have not received notification of legal action yet, but we will defend ourselves vigorously through the legal system. |
"Dairygold entered into the Welsh project in good faith to develop the business, but because of circumstances beyond our control it didn't work. | "Dairygold entered into the Welsh project in good faith to develop the business, but because of circumstances beyond our control it didn't work. |
"We have since sought meetings to try and find a resolution to the grant aid issue, but without success." | "We have since sought meetings to try and find a resolution to the grant aid issue, but without success." |