Smyth Aerospace Manufacturing, the Shannon-based company at the centre of a Garda inquiry into the alleged selling of counterfeit aircraft parts, has received £124,519 (€158,220) in grants from Shannon Development between 1997 and 1999, according to the regional development authority's annual report for 1999.

Presenting the report yesterday, Mr Kevin Thompstone, acting chief executive, said he would be seriously concerned about any firm in the aerospace sector involved with counterfeit spare parts but he declined to comment further on the current case, saying there had to be "due process".

The Garda investigation, which involves the US Federal Bureau of Investigation as observers, is expected to take some weeks to complete as thousands of spare parts from a Smyth Aerospace warehouse in the Shannon Free Zone industrial park are catalogued. Mr Thompstone said mechanisms were in place to give Shannon Development redress if a client firm was found to be acting inappropriately. According to the annual report, 2,545 jobs were created by indigenous companies and by companies at the Shannon Free Zone in 1999, a 12.5 per cent increase on the previous year.

Shannon Development-supported industry employs 21,468 people in the region.

The group, also involved in tourism development, had a turnover of £65.9 million and a pretax operating surplus of £1.8 million.

Mr Thompstone said the surplus was small in the context of the company's asset base and property portfolio.

The company's net assets amount to £136 million.

He added that the surplus would be used along with venture capital in a new regional initiative to develop a series of spin-off technology parks in large and medium-sized towns. Mr Thompstone said the "big question" the company had always grappled with was how to achieve development in other parts of the region, instead of focusing on "the golden triangle of Limerick, Shannon and Ennis".

Technology centres were now being developed at Tralee, Co Kerry, Thurles, Co Tipperary, and Birr, Co Offaly, with links to third-level institutions.

These would involve providing incubator units for start-up technology companies."

He said the centres would provide the impetus to learn from the National Technological Park experience in Limerick where close links were developed with the University of Limerick.

"As a region, and for Shannon Development as a company, competitive advantage into the future has to be much more about knowledge and less about money," he said.

A job creation target of 800 has been set for the new technology centres and in placing companies in smaller towns within the next two years.