Entrepreneurs have been bullied and forced to hand over control of their businesses after approaching the Development Bank of Wales for financial support, the Senedd has heard.

Paul Davies, who chairs the economy committee, raised 'extremely worrying' evidence from Dylan Jones-Evans, an economist and academic, about the Development Bank.

Mr Davies said the committee also received emails from people who had dealings with the bank and felt they had been bullied out or had their businesses essentially stolen.

Prof Jones-Evans said: “Unfortunately, I have been approached by … businesses prior to this review who feel they have not been treated fairly with valuations being too low, where decisions have taken far too long, and where terms are unacceptable.

“Worst still, there have been instances where some have been bullied by the directors imposed on them, where they have been forced out by dubious means and where founders feel they have not been supported by the bank.”

Prof Jones-Evans warned that young, inexperienced founders found themselves in this position and should have received far greater support.

Mr Davies said: “If these reports are accurate, those actions may well have extinguished that entrepreneurial spirit, which would be an absolute tragedy and exactly the opposite of what the bank was established to do.

“It only takes a brief look on a news website to find situations where allegations such as bullying have been made against other public institutions where, in some cases, they have been ignored and, as we know, sometimes these cases do not end well.

“I have discussed these accusations with the bank via correspondence and in a private meeting and they absolutely refute them.”

Mr Davies also raised concerns about the Development Bank being reclassified by the Office for National Statistics as central government in 2021.

He explained this leads to 'double counting', with the Welsh Government having to keep money in reserve to cover any uninvested funds given to the bank.

Rebecca Evans, Wales’ economy secretary, said the Development Bank has invested £778m in more than 3,900 businesses since 2017, supporting 41,700 jobs.

She said: “That’s a total impact of £1.66bn on the Welsh economy – real investment, real businesses, real growth, supporting businesses in every part of Wales.”