A KOREAN-owned firm, whose stay in the North-East ended in controversy, is being told to hand back thousands of pounds of Government grant aid.

The Northern Echo has learnt that Woo One is facing action over the £150,000 it was paid by the Department of Trade and Industry to aid its expansion plans.

The company, which supplied Samsung with computer casings, received the Regional Selective Assistance (RSA) cash four years ago after diversifying into microwave oven manufacturing.

Woo One was investigated over claims it was employing illegal immigrants from Northern China.

Then, in March, after announcing it was ceasing trading with the loss of 68 jobs, its factory in Hartlepool was badly damaged by a fire thought to have been started deliberately.

Last night, a spokesman for One NorthEast, which is responsible for administering RSA grants, said: "We are seeking to recover the full Regional Selective Assistance grant from Woo One of £150,000.

"This action is being taken as the company has not met the terms of the grant as it was required.

"A clawback provision exists to ensure that public money can be retrieved if any company does not fulfil the terms of a grant.

"We had withheld from trying to reclaim grant money from the company earlier this year following a fire at the premises in an effort to give the company as much opportunity as possible to generate new business, which it had indicated it would try to do."

The spokesman could not say what sanctions, if any, could be taken in order to retrieve the money.

Officials from One NorthEast have been in touch with the firm, whose parent company is based in South Korea.

The decision to clawback the grant is not connected with the illegal immigrant claims.

It was paid on the basis that Woo One created 75 jobs, which it did, but it is thought they did not keep those people in work long enough to meet all the terms of the deal.

Woo One was part of a wave of so-called "sunrise" firms from the Far East that were attracted to the region by financial sweeteners from the Government.

At its height, the factory employed up to 400 staff.