Financial firm asked to repay £700,000 Welsh government aid

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.

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".

However, the Federation of Small Businesses has questioned the policy of backing "low level" financial companies.

Negotiations

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.

"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.

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 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."