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Criticism Persists Over £3 Million Public Money Given To Failing Firm

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Criticism Persists Over £3 Million Public Money Given To Failing Firm

A group of AMs has raised serious concerns over the decision by the Welsh Government to invest more than £3 million in a Swansea based steel coating company which is failing.

Kancoat Limited is being supported by the government despite civil servants warning that the company was not doing well and was about to collapse.

The national assembly's Public Accounts Committee revealed that the government, led by the minister, ignored the committee’s advice and poured good into the firm.

The Welsh Government, on the other hand, said it had changed its procedures since.

Defending the finance ministers' impressive record of supporting failing businesses, Carwyn Jones told AMs that there must be an acceptance of risk by the Welsh government or we wouldn't offer support for anything."

The Kancoat company, a Swansea-based firm, was established to manufacture coat metal used to design food cans and other products.

Between May 2012 and February 2014, the company was awarded a lot of grants and loans estimated to be around £3.4m by the Government.

The bulk of the support was given after the Government's own financial reviewer raised serious concerns about the company’s financial projections in 2013.

The review revealed that the company’s business plan appeared weak and the whole project wouldn’t be supported because it proved to be a high risk.

A request for support by the company had previously been rejected by Finance Wales, Welsh government's investment arm, because of the company’s unacceptably high risk.

The Kancoat company went into administration in mid-September 2014.

The Public Accounts Committee report which was released on Tuesday this week said that the government investment authorities defied its own due diligence and failed to mitigate or recognize a number of potential risks.

PAC also released a report saying, “we are still unconvinced that the Welsh government should have poured even its initial investment.” They added that they expected a serious approach to risk identification, analyzing and mitigation in future.

In other news making headlines

Chief Of Taiwan's Central Bank Faces A Currency Headache

Perng Fai-Nan started his tenure as Taiwan’s central bank chief by defending his currency when Asia faced a financial crisis. Nearly two decades later as he approaches retirement, the Taiwan currency will pose a challenge again.

Perng, who is turning 78, will soon quit after twenty full years in his post meaning that he will have served longer as the central bank chief compared to his predecessor Alan Greenspan. Perng thought of spending more of his 2016 working in order to maintain currency stability, other than the fine-tuning interest rates.

Rising global protectionism fears and currency volatility have brought uncertainty over the outlook for the economy that depends majorly on exports, posing a challenge for Perng, who has greatly taken care of stability as a priority. The Taiwan country, which counts the United States as a counterbalance to China and a key for the facto ally, is unlikely wanting to irk the U.S with its currency.

"The central bank will make sure it has handled the currency. Taiwan will be in big trouble if the U.S president is determined to involve it in the currency issue, "the chief economist of the Fubon Financial Holding Company, Rick Lo, said.

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