Firms that claimed Covid supports may have shareholder payments investigated

business
Firms That Claimed Covid Supports May Have Shareholder Payments Investigated Firms That Claimed Covid Supports May Have Shareholder Payments Investigated
Ged Nash, a Labour TD who served on Publin Accounts Committee between 2012 and 2014, requested the investigation. Photo: Collins
Share this article

The Committee of Public Accounts (PAC) has been asked to investigate the payment of taxpayer-funded Covid supports to businesses that subsequently distributed cash to shareholders in the form of dividends.

Ged Nash, a Labour TD who served on PAC between 2012 and 2014, made the request according to The Irish Times.

Mr Nash last month wrote to Sinn Féin’s Brian Stanley, the committee’s current chairman, asking it to undertake an “an urgent examination” of the terms of the State’s employment wage subsidy schemes (EWSS) and its temporary predecessor, the TWSS.

Almost €9 billion has been paid out towards the wages of employees of pandemic-hit businesses as part of the schemes.

Mr Nash wrote to the PAC following a series of reports in The Irish Times about companies that had taken State subsidies while also making payments to shareholders.

Advertisement

This includes O’Flaherty Holdings, the company with the Mercedes franchise for Ireland. The company received almost €1.8 million in subsidies in 2020, while also paying a similar amount to its offshore shareholder entity.

The Government has since pledged to examine the law around State subsidies and what qualifies companies to receive the payments.

In his letter to Mr Stanley, Mr Nash asks PAC to investigate the issue under six different headings, such as how common the payment of dividends is among State-supported companies.

The Government does not currently know how much taxpayers have paid to businesses that subsequently paid dividends to shareholders.

'Controls and conditions'

Mr Nash also asks PAC to look into “what controls and conditions ought to be attached to such schemes in the future to prevent the possibility of abuse of the schemes and to better protect the interests of the taxpayer and the public interest more broadly”.

There are currently no mechanisms in place to prevent State-supported businesses from paying dividends.

Other State-subsidised businesses that paid dividends while on taxpayer supports include doughnut chain Krispy Kreme, which sent more than €1.6 million to the UK after getting Irish taxpayer support, and John Sisk & Co, Ireland’s largest building firm, which made payments to the Sisk family.

“The intended purpose of these schemes is to keep workers in employment at a challenging time for the Irish and global economy,” wrote Mr Nash. “I think you will agree that the schemes were not intended to inflate the bottom line of very profitable firms.”

Mr Nash said the Government had acknowledged the problem. Taoiseach Micheál Martin, Minister for Finance Paschal Donohoe and Tánaiste Leo Varadkar have all said companies that received State supports and then paid dividends should refund taxpayers.

Read More

Want us to email you top stories each lunch time?

Download our Apps
© BreakingNews.ie 2022, developed by Square1 and powered by PublisherPlus.com