Watchdog asked to investigate shareholder payments by companies taking backing of Covid
A former member of the Public Accounts Committee (PAC), the DÃ¡il state’s spending watchdog, asked him to investigate the payment of taxpayer-funded Covid supports to companies who then distributed cash. money to shareholders in the form of dividends.
Ged Nash, a Labor TD who served on PAC between 2012 and 2014, wrote last month to Brian Stanley of Sinn FÃ©in, the current committee chair, asking him to undertake an “urgent review” of the terms of the programs. State employment wage subsidies (EWSS) and its temporary predecessor, the TWSS, which paid around â¬ 9 billion for the wages of employees of companies affected by the pandemic.
Mr Nash wrote to PAC following a series of articles in The Irish Times about companies that had received state subsidies while making payments to shareholders, including O’Flaherty Holdings, the company with the Mercedes franchise for Ireland. It received nearly 1.8 million euros in grants in 2020 and also sent a similar amount to its offshore shareholder entity in the same year.
The government has since vowed to review the law surrounding state subsidies to see if it needs to be tightened to prevent companies from receiving subsidies they do not need.
In his letter to Mr. Stanley, Mr. Nash asks PAC to investigate the matter under six different headings, including how widespread dividend payment is by state-backed companies. The government does not know how much taxpayers paid to companies which subsequently rewarded shareholders.
Mr Nash also asks PAC to consider ‘what controls and conditions should be attached to such schemes in the future to prevent the possibility of abuse of schemes and to better protect the interests of the taxpayer and the public interest more broadly. “.
Currently, there are no barriers to publicly funded, dividend-paying companies, and no method for taxpayers to claw back support from companies that then sent money to shareholders.
Other state-subsidized companies that paid dividends despite receiving taxpayer help included donut chain Krispy Kreme, which sent over â¬ 1.6million to the UK afterwards. getting help from Irish taxpayers, and John Sisk & Co, Ireland’s largest construction company, who made the payment to the wealthy Sisk family.
“The aim of these programs is to keep workers in employment at a difficult time for the Irish and global economy,” Mr Nash wrote. “I think you will agree that the programs were not intended to boost the bottom line of very profitable companies.”
TWSS, which was introduced at the start of the pandemic, has cost taxpayers â¬ 3 billion, while its successor, EWSS, has so far cost around â¬ 6 billion.
Mr Nash said the government recognized the problem. Taoiseach MicheÃ¡l Martin, Finance Minister Paschal Donohoe and TÃ¡naiste Leo Varadkar all said companies that received state aid and then paid dividends should reimburse taxpayers.
“Due to the flaws in the design of TWSS and EWSS and the complete absence of certain controls and conditions that could have prevented such blatant behavior in the first place, ministers are now left with public appeals for that these companies reimburse the money. “said Mr. Nash.
PAC has acknowledged the problem but has yet to say whether it will investigate. It is likely to be reviewed at its next meeting, which has not yet been scheduled.
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