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Falfab

Volume 281: debated on Tuesday 16 July 1996

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To ask the President of the Board of Trade what representations he has received from hon. Members on behalf of FalFab LLC since 1994; and on what dates these were received. [35220]

[holding answer 1 July 1996]: We have been unable to trace any record of representations from hon. Members on behalf of this company.

To ask the President of the Board of Trade (1) what consultations were made by his Department to ensure that the estimated value of FalFab at the time of its application for regional selective assistance was correct; and if he will make a statement; [35248](2) what verification was undertaken by his Department to ensure that sufficient capital was available to FalFab LLC to qualify for regional selective assistance from his Department; what assessment he has made of the adequacy of this verification; and if he proposes to recover any of the granted financial assistance. [35247]

[holding answer 1 July 1996]: FalFab was a newly-created company set up as a joint venture between two other US-based companies. The Department's offer of grant contained preconditions in order to ensure that capital of at least £1 million had been injected into the company before grant was paid. Appropriate audited confirmation that these preconditions had been met was submitted at the time of FalFab's claim for the first instalment of grant.Although the company has laid off its workforce, discussions aimed at securing a viable future for the business are taking place and it would be premature for the Department to seek recovery.

To ask the President of the Board of Trade what safeguards are in operation to protect his Department's position in relation to regional selective assistance grant and aid given to FalFab LLC if (a) the company ceases to trade and (b) the terms and conditions of the grant are not met; and if he will make a statement. [35246]

[holding answer 1 July 1996]: If the company ceases to trade, or the terms and conditions of the offer are not met and there is no prospect of future viability, my Department will seek to recover grant from the company. The Department also has parent company guarantees to repay the grant if FalFab is not in a position to do so.