MPs criticise business aid body

The committee said the business aid body was poorly supervised

MPs have found evidence of conflicts of interest and insider dealing in a body set up to back new businesses in NI.

The Public Accounts Committee said poor supervision of the Emerging Business Trust resulted in one of the worst cases of impropriety it had seen.

It said the case plumbed new depths in the failure of the Department of Enterprise to ensure basic principles of public business were observed.

The trust was set up in 1996 to provide finance for small businesses.

It was part-funded by the small business agency Ledu.

BBC Northern Ireland business editor James Kerr said the report was unusually stinging, even for a committee which never minces its words.

'£1.4m in fees'

The report highlighted how the deputy chair of the Ledu board, Teresa Townsley, and her husband, were partners in an accountancy practice which was given the contract to manage the trust.

The committee said this was done "without proper tendering and the partnership received £1.4m in fees".

Mr Townsley also bought shares in a company later backed by the trust.

The report said the timing and pricing of this deal was "profoundly disturbing and amounted to insider trading".

Liberal Democrat MP Alistair Carmichael, a member of the committee, said civil servants who failed to detect a conflict of interests must be held accountable.

"Sometimes we find a degree of incompetence, sometimes we find a degree of wilful blindness, sometimes we find people who choose to ignore part of the rules," he said.

"The quite remarkable thing about this report is that we seem to have uncovered all of these and more."

He added: "It is observed in the course of this report that this is not new ground.

"The Public Accounts Committee first reported on how these bodies should be managed back in 1994, and if any regard had been taken of what the committee said then by the department in Belfast, none of this would have happened."

'Victimised'

Mrs Townsley told the BBC she felt "victimised" by the Public Accounts Committee's report.

She said the committee had not seen a detailed rebuttal she had given to the findings of the initial investigation.

In relation to her husband's shares, she said he felt everything he did was totally open and above board.

Mrs Townsley emphasised the whole of the trust's board had decided to invest in her husband's company.

She said they knew he was getting shares and at what price.

She said it was for unpaid work carried out for the company over a two-year period.