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| Welsh government's £50m investment fund to be examined | Welsh government's £50m investment fund to be examined |
| (about 2 hours later) | |
| The Welsh government's flagship £50m biotech investment fund is to be examined by auditors, BBC Wales can reveal. | The Welsh government's flagship £50m biotech investment fund is to be examined by auditors, BBC Wales can reveal. |
| The Wales Life Science Investment Fund is chaired by multimillionaire life sciences entrepreneur Sir Chris Evans. | The Wales Life Science Investment Fund is chaired by multimillionaire life sciences entrepreneur Sir Chris Evans. |
| Backed with £50m of public money, it has invested £5m in Guildford-based stem cell company ReNeuron. | Backed with £50m of public money, it has invested £5m in Guildford-based stem cell company ReNeuron. |
| The Wales Audit Office is to examine this deal alongside the Welsh government's internal audit team. | The Wales Audit Office is to examine this deal alongside the Welsh government's internal audit team. |
| Sir Chris was an existing shareholder in ReNeuron when the investment was made, and purchased an additional 24 million shares personally after the fund's decision in June this year. | |
| Chair of the assembly's public accounts committee Darren Millar said he had referred the deal to the WAO as he believed the circumstances would "raise eyebrows". | Chair of the assembly's public accounts committee Darren Millar said he had referred the deal to the WAO as he believed the circumstances would "raise eyebrows". |
| A spokesperson for the Wales Audit Office said: "I can confirm that concerns have recently been raised with the Auditor General for Wales about the operation of the Wales Life Sciences Investment Fund and we are currently liaising with the Welsh government's Internal Audit Service on the matter." | A spokesperson for the Wales Audit Office said: "I can confirm that concerns have recently been raised with the Auditor General for Wales about the operation of the Wales Life Sciences Investment Fund and we are currently liaising with the Welsh government's Internal Audit Service on the matter." |
| The Welsh government have confirmed they are working with auditors to review the issue. | The Welsh government have confirmed they are working with auditors to review the issue. |
| A spokesman added: "In the meantime we have received assurances from Finance Wales that it is entirely satisfied there has been no breach of procedures and actions have been taken in line with industry norms." | A spokesman added: "In the meantime we have received assurances from Finance Wales that it is entirely satisfied there has been no breach of procedures and actions have been taken in line with industry norms." |
| 'Fully declared' | 'Fully declared' |
| ReNeuron is currently conducting clinical trials of several stem cell products, most notably one to help patients affected by strokes. | ReNeuron is currently conducting clinical trials of several stem cell products, most notably one to help patients affected by strokes. |
| A spokesman for Sir Chris said his existing shareholding in ReNeuron was fully declared to and approved by the Welsh government and that he had made the additional investment later at the request of the other institutional investors. | A spokesman for Sir Chris said his existing shareholding in ReNeuron was fully declared to and approved by the Welsh government and that he had made the additional investment later at the request of the other institutional investors. |
| He said that it was difficult to fathom why the deal was now being examined as both the Welsh Government and Finance Wales had said they were "very comfortable with the procedures that were followed". | He said that it was difficult to fathom why the deal was now being examined as both the Welsh Government and Finance Wales had said they were "very comfortable with the procedures that were followed". |
| He stressed that Sir Chris had removed himself from the final vote of the Fund on whether to invest public money in ReNeuron as had three other board members with connections to the company. | He stressed that Sir Chris had removed himself from the final vote of the Fund on whether to invest public money in ReNeuron as had three other board members with connections to the company. |
| According to the company's release when the investment package was announced on 22 July, Sir Chris orchestrated the deal for the Wales Life Sciences Investment Fund to put money into ReNeuron, which was followed by several other big institutional investors, raising a total of £25m. | According to the company's release when the investment package was announced on 22 July, Sir Chris orchestrated the deal for the Wales Life Sciences Investment Fund to put money into ReNeuron, which was followed by several other big institutional investors, raising a total of £25m. |
| The fund now owns 11% of the company. | The fund now owns 11% of the company. |
| The Welsh government has also given the company a non-repayable £7.8m grant to move its manufacturing and research facilities to Wales in the coming years. | The Welsh government has also given the company a non-repayable £7.8m grant to move its manufacturing and research facilities to Wales in the coming years. |
| Economy Minister Edwina Hart appointed Sir Chris as chair of her sector panel to advise her on how to encourage the Life Sciences industry in Wales. One of the panel's conclusions was that there was a "corrosive perception" of a lack of finance at every level in the industry here. | Economy Minister Edwina Hart appointed Sir Chris as chair of her sector panel to advise her on how to encourage the Life Sciences industry in Wales. One of the panel's conclusions was that there was a "corrosive perception" of a lack of finance at every level in the industry here. |
| Ms Hart took the decision to set up the Wales Life Sciences Investment Fund in order to remedy the lack of finance, with an initial budget of £50m with the aim of attracting a similar level of private funding on top. | Ms Hart took the decision to set up the Wales Life Sciences Investment Fund in order to remedy the lack of finance, with an initial budget of £50m with the aim of attracting a similar level of private funding on top. |
| Sir Chris formed a new company called Arthurian, which then bid for and won the tender to manage the Wales Life Sciences Investment Fund which was launched in March this year. | Sir Chris formed a new company called Arthurian, which then bid for and won the tender to manage the Wales Life Sciences Investment Fund which was launched in March this year. |
| Its second investment was in ReNeuron, which Sir Chris says he has been "intimately involved with" over the past decade as one of the company's founders. | Its second investment was in ReNeuron, which Sir Chris says he has been "intimately involved with" over the past decade as one of the company's founders. |
| He already had an interest in the company through one of his investment companies when discussions began about a public investment in ReNeuron by the WLSIF. Despite playing a key role in these discussions, he stood aside from the final vote on 25 June when the Fund decided to go ahead with the investment. | He already had an interest in the company through one of his investment companies when discussions began about a public investment in ReNeuron by the WLSIF. Despite playing a key role in these discussions, he stood aside from the final vote on 25 June when the Fund decided to go ahead with the investment. |
| 'Raised eyebrows' | 'Raised eyebrows' |
| Between 25 June and the public announcement of the ReNeuron investment on 22 July, Sir Chris purchased an additional 24 million shares in the company at a cost of around £600,000 via two family trusts, Hookstone Limited and Excalibur Malta Ventures Limited. | Between 25 June and the public announcement of the ReNeuron investment on 22 July, Sir Chris purchased an additional 24 million shares in the company at a cost of around £600,000 via two family trusts, Hookstone Limited and Excalibur Malta Ventures Limited. |
| Mr Millar said: "I think this arrangement will certainly raise a few eyebrows in terms of the way this cash has been awarded and people will want to be satisfied that there's been nothing irregular in the awarding of this cash to this particular company." | Mr Millar said: "I think this arrangement will certainly raise a few eyebrows in terms of the way this cash has been awarded and people will want to be satisfied that there's been nothing irregular in the awarding of this cash to this particular company." |
| A spokesman for Arthurian said: "It is difficult to fathom why there should be any examination of this matter as both the Welsh government and Finance Wales have told us that are very comfortable that proper procedures were followed. We will of course give the Audit Office every assistance they require. | A spokesman for Arthurian said: "It is difficult to fathom why there should be any examination of this matter as both the Welsh government and Finance Wales have told us that are very comfortable that proper procedures were followed. We will of course give the Audit Office every assistance they require. |
| "All interests were declared in full. Sir Chris was not party to the final investment decision by the board of Arthurian to invest in fact was not even on the meeting. After the final decision was made, the matter is referred to Finance Wales for ratification, which it received. | "All interests were declared in full. Sir Chris was not party to the final investment decision by the board of Arthurian to invest in fact was not even on the meeting. After the final decision was made, the matter is referred to Finance Wales for ratification, which it received. |
| "Separately, the Welsh Grants Committee took its own decision on ReNeuron grants. This was a major win for Wales and Sir Chris invested personally after the Fund's investment. He paid full placing price and has received no advantage. If the company does well the Welsh Fund and other investors will do well too." | "Separately, the Welsh Grants Committee took its own decision on ReNeuron grants. This was a major win for Wales and Sir Chris invested personally after the Fund's investment. He paid full placing price and has received no advantage. If the company does well the Welsh Fund and other investors will do well too." |
| A government spokesman said: "Finance Wales acts as the Holding Fund for the Wales Life Sciences Investment Fund on behalf of the Welsh Government. Arthurian Life Sciences Limited was appointed as the Fund Manager following a procurement process and there is a Fund Management Agreement that requires Arthurian to follow appropriate governance arrangements in line with normal market practice. | A government spokesman said: "Finance Wales acts as the Holding Fund for the Wales Life Sciences Investment Fund on behalf of the Welsh Government. Arthurian Life Sciences Limited was appointed as the Fund Manager following a procurement process and there is a Fund Management Agreement that requires Arthurian to follow appropriate governance arrangements in line with normal market practice. |
| "Sir Chris Evans disclosed an interest as an existing ReNeuron shareholder and recused himself from all discussions at Arthurian Board and did not attend the meeting or vote on the matter." | "Sir Chris Evans disclosed an interest as an existing ReNeuron shareholder and recused himself from all discussions at Arthurian Board and did not attend the meeting or vote on the matter." |