Ideoba collapse: Tories want inquiry over adviser role

Edwina Hart and Andrew Auerbach at Ideoba's launch in January 2014

The Conservatives have called for an independent inquiry into the role of ministerial advisers after the collapse of a hi-tech firm.

Ideoba chief executive Andrew Auerbach claims he was told by an adviser that Welsh ministers pulled funding because the firm was run by ex-Plaid Cymru MP Adam Price.

The Welsh government said the suggestion was "frankly ridiculous".

Mr Auerbach said ministers had agreed a loan of £150,000 to tide the firm over.

He claimed "political motives" intervened over the bridging loan.

He said he had been told by the adviser to Economy Minister Edwina Hart - the property developer David Goldstone - that Ideoba would not get the money because Mr Price was standing as a Plaid Cymru candidate in the assembly election in 2016.

The Welsh Conservatives have now called for an independent inquiry into his role.

Ideoba specialised in financial services with the aim of creating website search engines, giving investment organisations access to advice from 300 million experts across the world.

Significant private investment has been put into the company by Mr Auerbach and Mr Price, who met at Harvard University in the United States.

There has also been public money invested by the Welsh government but it has not been willing to release the details of how much is involved.

A Welsh government spokesman said the claim that they didn't give the company support because of Mr Price's political affiliations was "demonstrably false".

He added: "We have worked very closely with Andrew Auerbach and Adam Price and provided R&D funding to help them establish their company in Wales.

"We also offered them additional financial support in early March to cover costs while they sought further investment. Our relationship with the company was welcomed by Andrew Auerbach in February this year,

"To now suggest we withheld funding due to the political affiliation of Adam Price, who also chairs our Innovation Advisory Council, is frankly ridiculous."

The firm employed up to 10 well paid, highly-skilled workers at Pencoed near Bridgend with the aim of eventually employing 100.

It emerged last month that it had gone out of business after operating for a little over a year.

Mr Auerbach says he was told by Mr Goldstone that the company would not receive the money.

The political position of the former Plaid Cymru MP Mr Price was said to be the reason.

Mr Price had been selected to fight Carmarthen East and Dinefwr seat at the next assembly election in 2016 before Ideoba was set-up.

There is speculation that the company may have taken his focus away from standing however this turned out not to be the case.

The Welsh government did eventually offer a loan but it is believed the terms that were less favourable than the initial £150,000.

'Sad day'

Mr Auerbach said that the withdrawal of this bridging loan meant the company could not continue trading while it waited for the cash injection from the investor.

"As a high-tech entrepreneur from the US, it's hard to foresee the effect that UK politics would have on our start up, Ideoba," he said.

"We were 100% focused on getting Ideoba - which is a sound concept - up and running in Wales.

"Who could predict that politics and those who are trying to harm or discredit Adam for political reasons would affect us? This sort of thinking was not really on our radar."

'Team Wales at its best' said Adam Price at the launch last January

"I am disappointed to be dragged into this mess, purely based on political motives to hurt Adam. As hi-tech entrepreneurs, we are accustomed to dealing with business risk, but not this sort of political nonsense."

"It's a sad day for Wales, a sad day for entrepreneurship in the UK."

The Welsh Conservatives have written to the permanent secretary to request he looks into the role and accountability of ministerial advisers.

They have also written to the Auditor General to raise concerns and call for an inquiry.

A spokesman said it raised serious questions and there was "no question that there must be an independent inquiry into this affair."

The party also wants to know why its request for an urgent question in the Senedd has been rejected by the presiding officer.

At the launch in January 2014, Mr Price had praised the support from the Welsh government and called it "Team Wales at its best".

The firm's research and development centre opened in south Wales for what would be a global company with most of its initial market in London and New York.

The Welsh government spokesman added that Mr Goldstone provided advice on property-related matters to officials on a consultancy basis.

His terms and conditions only allowed for advice to officials on these areas and on any other subject area, Mr Goldstone "would be providing his own personal views which would not be considered as professional advice".

The spokesman added: "Any suggestion that an email he sent to the company in February led to the possibility of a loan to Ideoba 'evaporating' is simply untrue.

"In fact the Welsh government offered the company a loan in March this year which the company did not take up."