A games company based in Treforest, south Wales has gone bust after receiving £1.4 million in finance from the Welsh Government.
Oysterworld Ltd moved its operation from London to Wales in 2013. Records show that from October 2013 to August in 2015 Oysterworld Ltd received eight capital grants from the Welsh Government totalling £1,414,500.
It is believed that up to 100 people may have lost their jobs with many debts still outstanding. Disgruntled employees have been taking to social media, with some still not paid for their work since March.
Records from Companies House show that all of the five Directors of Oysterworld are based in London, one of whom is a Chinese national.
Records also show that in addition to receiving grants from the Welsh Government, Oysterworld received a number of payments from investment funds in the Cayman Islands and Delaware, two states renowned as international centres of offshore tax avoidance.
All online activity for Oysterworld seems to have ended in early June this year. But on 29 June, Oysterworld registered a debt of £220,000, plus any interest accrued, to Christopher Rough and Timothy Rigby, who are both described as ‘investors’ and are both also based in London.
On 23 August Osyterworld Ltd registered a legal charge with Alfandari Private Equities Ltd. Alfandari specialises in ‘distressed investments’.
The collapse of Osyterworld comes in the same week as Sir Alistair Graham, a former watchdog on standards in public life, claimed former Minister Edwina Hart may have had a conflict of interest after approving £3.4 million in Welsh Government finance to a Swansea-based company that also went bust. Kancoat was situated less than half a mile from Ms Hart’s former constituency.
The Welsh Government’s own financial due diligence reviewer described Kancoat’s business plan as appearing “weak and inconsistent”. Ms Hart ignored this advice and approved the £3.4 million in grants and loans to the “high risk” company.
In February 2014 Ms Hart approved further significant funding to Oysterworld of £415,000. At the time she said “I am delighted to support this expansion which will not only create high quality jobs but help build a strong gaming sector in Wales and develop a substantial skills base.” Oysterworld also announced that it would spend the next 18 months setting up a team to develop and produce computer games for export. But exactly 18 months on since receiving that business finance from the Welsh Government the company has entered administration with debts left unpaid and its team members now out of their jobs.
Plaid Cymru’s Neil McEvoy AM, who was tipped off about the company, said:
“It’s amazing how Labour keep losing taxpayers’ money in Wales like this. It’s happening so often now that people will rightly wonder whether Labour just don’t know what they’re doing or whether there is something more sinister at play.
“In Cardiff, we still haven't forgotten the Lisvane land deal, when Labour sold land worth at least £39 million for just £2 million. The Cardiff taxpayer got absolutely swindled but still nobody's gone to jail over that.
“Now Labour are handing out millions to companies whose only knowledge of Wales is how easy it is to take the Welsh Government for a ride. They're taking millions off the Labour Welsh Government with one hand and more money from tax-dodging, offshore investment funds with the other.
“Now everyone involved in this games company has sadly lost their job. And to make things worse Labour has just cut Jobs Growth Wales funding in half, making it harder for them to find new ones. No jobs and no growth is becoming the story of Labour in Wales.
“These are no longer just one off cases. There is a pattern emerging of dodgy deals being done with very dodgy people and the Welsh taxpayer losing out on millions. I'll be referring this case to the Public Accounts Committee, who wrote an absolutely damning report of the Welsh Government's oversight of funding for the Lisvane land deal. This time I want Edwina Hart and the directors of Oysterworld brought before the committee to answer for what has happened.
“I'll also be reporting the matter to the Wales Audit Office and the National Fraud Initiative to see if there will actually be some serious consequences for what has happened.
“I said in the May Assembly election that if I was elected I'd clean up Cardiff Bay and that's exactly what I'm doing. More and more people are coming to me with tipoffs. I'd encourage anyone with information on Labour abusing taxpayers' money to do the same. I will investigate.”