A publicly funded charity created to regenerate Ebbw Vale has ceased trading after it hit financial trouble.
Ebbw Vale and District Trust (EVAD) has gone into liquidation, leaving a nursery and a media centre shut in its wake and at least 24 people out of work.
It received hundreds of thousands of pounds in Welsh Government Communities First cash as well as money from Heads of The Valleys fund.
Kevan Lines, chairman of the trust's board, said the trust had had a cash flow and profitability issue, and said it also had an issue with debt.
But he revealed that board members were not given the true picture of the situation at the organisation.
He said he was "incredibly disappointed" and it had come as a complete shock to him - with board members finding out about the financial situation three weeks ago.
He said the "economic downturn affected us, a reduction in income affected us. But we weren't given the full picture."
"Twelve years of effort on my part on a completely voluntary basis has come to an end. But I would say I am proud of what the organisation has achieved in the 12 years it has been operating," he said.
"Neither the members of the board or I were aware of the gravity of the financial problems at the trust."
The board sought specialist advice from an insolvency practitioner after they discovered the issue, and members of staff were told on October 4.
Workers at the Candy Stripe nursery lost their jobs the next day, while others in EVAD continued until last Tuesday.
The organisation has ceased trading, and a liquidators meeting is due to take place in early november, when a liquidator will be appointed and creditors will be contacted.
The organisation had received £1.07 million in grants in 2011, including £886,606 in Welsh Government Communities First and Heads of the Valleys fund money.
It got £346,000 of Communities First cash in 2012. Blaenau Gwent council gave £69,000 to EVAD in 2011 and £12,000 in 2012.
The Welsh Government said EVAD had been the lead organisation for the three Communities First partnerships in Ebbw Vale since April 2008.
A spokesman said: "Communities First officials identified concerns over the organisation's financial stability in July when undertaking a due diligence process into the Trust's suitability to be a lead organisation for the new Communities First programme.
"As a result of those concerns, no Communities First funding has been paid since then."
The charity's work for Communities First has transferred to the Gwent Association of Voluntary Organisations, saving 16 jobs.
GAVO will now review the funding application previously submitted by the trust for a new so-called Communities First "cluster" in Ebbw Vale and will submit a revised version as soon as possible.
Closure is 'very, very sad day'
Rachel Owen, 26, from Cwm was employed to run courses at Cave Studios, based at Gwent Court, Victoria, Ebbw Vale.
She also took wedding photographs for the commercial side of the social enterprise, said it had been a "very, very sad day," closing the Cave and leaving what she described as "a dream job."
Owen said all wedding photograph bookings will be honoured after the Cave finally closed on October 5.
Ms Owen, had been the sole full-time employ at the Cave since June 2009.
Louise Penny, general manager of Candy Stripes had a average of 28 children a day with 10 full and part time staff and seven supply workers.
It closed on October 5 and Ms Penny said she was still struggling to get her head around what had happened."It's quite emotional. I'm from Blaina, I've always lived in Blaina. I have worked really hard to build up the reputation that we have got.," she said.
"It's just been blown away overnight."
The general manager said she tried her "damnedest" to try to save it, and had been in touch with local business people who were interested in investing.
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