A former community garden outside Llandrindod Wells has been left a “legal and financial mess”, according to its interim board.

Ashfield Community Enterprise, a community benefit society based in Howey just outside Llandrindod Wells, was deregistered by the Financial Conduct Authority after failing to provide accounts for over two years.

An interim board was established to assess the situation, and has now revealed the depth of the crisis facing the site.

For 11 years the site functioned as a community growing area and social enterprise, providing allotment and growing spaces for individuals and groups, hosting an outdoor nursery for pre-school children and a men’s shed, supported business set-up for new local enterprises, ran numerous short courses and a weekly market stall and weekly luncheon club and two units of affordable housing. It also arranged for meals to be delivered during the Covid lockdown.

But a statement released by the board has now said “the hard work involved was at a cost to sound financial and legal governance over the past three years”.

After the deregistration the interim board was established “to try and untangle the legal and financial mess left behind”.

The new board discovered “a substantial lack of paperwork, inadequate insurance and mounting debts”, the statement added.

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A second Special General Meeting was called to update shareholders of the situation.

The National Lottery Community Fund has already confirmed that it is investigating after “having received a complaint about Ashfield Community Enterprise” although it would not comment further while that investigation is continuing.

The statement from the interim board added: “The future of Ashfield rests in the hands of the Big Lottery Fund who have a legal charge on the property until 2030, and on the ability of the association to pay its debts.

“We will have to wait and see what happens but there is a lot of goodwill in the area and the site has been well used in the past by many who have happy memories of their involvement."

The debts could yet fall on roughly 200 shareholders who brought £20 shares in the community benefit society.

According to the rules set out by the Financial Conduct Authority: “Any liabilities generated by the society before registration is cancelled will not be affected by cancellation. This means creditors can take legal action against remaining members of the now unregistered society to recoup these debts.”

At the special meeting on Tuesday evening (September 20) shareholders “were appraised of emerging information concerning finances, and also received additional advice of the options which could be considered for re-organisation or dissolution", the statement added.

“The board and advisers were thanked for their substantial efforts to secure financial information and shareholders authorised the board to further examine all options.”