The Serious Fraud Office is investigating the collapse in December 1994 of ROM-Data Corporation. The data capture and conversion company, based in Falmouth, received pounds 825,000 in Regional Selective Assistance and, according to a report by the Department of Trade and Industry, made available last night, there were "a number of serious deficiencies" in the handling of the case.
An internal investigation by the DTI of its handling of its dealings with ROM-Data criticises the way in which "key events" were documented and the assessment of the risks associated with the company. It says that too little attention was paid to the background of the company and to its associates overseas.
The report also concludes that too much emphasis was placed on keeping the company afloat and too little to safeguarding the Department's position. There is uncertainty over the extent to which the Government may be able to recover funds.
The Department is further criticised for placing too much reliance on the results of a meeting of the South West Industrial Development Board at which few members were present. The role of the board, made up of unpaid local buisness people, is to provide independent advice on commercial issues associated with RSA.
The report stops short of discussing the bahaviour of individuals or any matters under investigation by the SFO. It says that ministers will "look to make further information public" once disciplinary procedures have been complete.