Company given £400k States loan is liquidated

Friday 21 October 2016

A software company which received £400k from Jersey's Innovation Fund has been put into liquidation.

The news emerged through a notice in the Jersey Gazette which says that a meeting of the creditors of Logfiller Limited will be held on the 4th November, by liquidators Grant Thornton.

It's not yet clear whether the States will be able to recover any of the lost funds.

Logfiller were loaned the money last year to support the development of, “...a sophisticated computer software solution that measures user experience of application and system use." They said that if successful, the product would create “a significant number of full time jobs in the Island."

But earlier this year it appeared that the company had left the Island, and it seems that no "sophisticated computer software solution" has emerged.

The Assistant Minister responsible for Innovation, Senator Philip Ozouf said:

"As was made clear to the States in a statement in June this year, a number of actions have been taken in respect of the Jersey Innovation Fund. One of those was that the States instructed a local specialist insolvency practice to take whatever action was necessary to protect the States’ interests. The announcement by Logfiller was a direct consequence of this. Liquidators have now been appointed. The States has made provision for default, as detailed in the States Accounts, and the States continues to reserve its position in respect of the loan.”

Speaking in the States at the time of that statement, Senator Ozouf said he took "full responsibility" for the £400k loan,  but  that some businesses backed will succeed, and some will fail.

He added that ministers expected up to 50% of the companies backed by the fund to fail, and for the money to be written off.

“Let me be absolutely clear, the Minister and that is delegated to me, takes full responsibility and accountability for the decisions taken,” said the Senator.

“The board (of the Innovation Fund) on this occasion, in my view, acted properly and discharged their obligations properly. I would have made the same decision, but some businesses will fail and others won’t - that is the nature of the deal.

“No-one has evidence for the future and a 50% provision for this was made at the time. The loans were not secured but I can’t stress enough of the diligence the board displayed in assessing businesses.”

The States’ spending watchdog, the Comptroller and Auditor General, has announced that she will be looking into the Logfiller case.