Economic Development Minister Paul Robichaud is considering the provincial government’s options on how to respond to a forensic audit that showed Atcon Holdings Inc.’s revenues may have been misstated before it received $50 million in provincial loan guarantees.

CBC News obtained a copy of the forensic audit completed by RSM Richter Inc. that showed Atcon’s revenues may have been overstated by as much as $34.5 million in the fiscal year ending January 2009.

The Miramichi-based manufacturing company received three loan guarantees totaling $50 million later that year.

Robichaud told reporters on Thursday that suing Grant Thornton, the company that audited Atcon’s financial records, could be considered but he said the province is unlikely to follow that specific option.

“[A lawsuit] is something that we could consider, but I already said in the past it is not an option that we are going to look at this point. But we are looking at every option at this point,” Robichaud said.

'They should have been more prudent and should have asked for more verification on that information that they were getting from that company.'— Economic Development Minister Paul Robichaud

“This is something that when I got it, I said to myself, It is another part of that saga that gives me another good indication why the former government should not have gone forward with the $50 million loan guarantee.”

In its conclusion, the forensic audit says Atcon’s finances had “serious accounting and financial reporting problems” for at least two years before the provincial government handed over the loan guarantees.”

“There appears to have been a systematic approach by management to overstate assets, revenues and profits, understate liabilities, expenses and losses,” according to the 92-page report.

The economic development minister said the former Liberal government should have done a better job of examining Atcon’s financial records before dispensing with the loan guarantees.

“They should have been more prudent and should have asked for more verification on that information that they were getting from that company,” Robichaud said.

Atcon received three loan guarantees worth $50 million in 2009. An audit shows the company may have misstated its revenues by as much as $34.5 million. (CBC)

“I do believe the government did — and when I’m talking about the government I’m talking about the bureaucrats — was doing their job by giving good advice to the government of the time of not providing the $50 million loan to the Atcon project or company and [the former Liberal government] decided to overrule the advice they were getting from the experts.

CBC News reported in October that five senior civil servants on the New Brunswick Industrial Board rejected Atcon’s proposal for three loan guarantees.

The board reviewed three requests from Atcon Holdings in January, February and March 2009, seeking $50 million in loan guarantees.

The civil servants recommended against providing the loan guarantees. But the provincial government advised Atcon it had approved the $50-million package on April 24, pending several conditions being met.

The loan guarantees were officially announced on June 17. Atcon went into receivership in March 2010.