01 February 2009

Taxpayer cash in mysterious company unrecoverable

The provincial government will have to write off  upwards of $675,000 in taxpayers money sunk into a mysterious company in 2006 according to notes in the government’s audited financial statements for 2007.

In January 2008, Bond Papers first told you about $500,000 of taxpayer’s money given to a company called SAC Manufacturing and over the weeks after that the Telegram’s Rob Antle dug deeper.

The province’s innovation department released more details on the commercialization program to the Telegram once the SAC fiasco broke in the news.  SAC received the largest grant possible even though, as the innovation minister acknowledged at the time, the company reportedly had “cash flow issues.”

There’s was no news release about the money at all and when questioned on it later, then-innovation minister Trevor Taylor could not explain why his department didn’t issue a news release on the investment.

Antle reported the company received a provincial government loan of $175,000.  In December 2006, the company received a half million under the provincial government’s commercialization program.  Four months later the company had closed its Paradise, NL offices and relocated to Alberta.  By September 2007, the company had ceased operating.

There was no notation on the company’s failure in last year’s audited financial statements even though they were finished around the time the company went under and released to the public six months after it ceased operation.

There’s been no mention of the investment in either the 2007 or 2008 auditor general’s report.

SAC Manufacturing supposedly had developed a natural gas compressor but no other details have ever been made public.