janvier 24, 2022

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Shareholder payments to companies that claim support for Covid may be investigated

The Public Accounts Committee (PAC) was asked to investigate taxpayer-financed Covid support payments to companies that subsequently distributed cash to shareholders in the form of dividends.

Jed Nash, a staff member who served on PAC between 2012 and 2014, submitted the application according to Irish Times.

Mr Nash wrote last month to Brian Stanley, the current chair of the Sinn Fein Commission, asking it to conduct an « urgent examination » of the terms of the state’s Employment Wage Support Scheme (EWSS) and its interim predecessor, TWSS.

Nearly 9 billion euros have been paid to employees of companies affected by the pandemic as part of the schemes.

Mr Nash wrote to PAC after a series of reports in the Irish Times about companies receiving government subsidies while making payments to shareholders.

This includes O’Flaherty Holdings, the company that holds the Mercedes franchise in Ireland. The company received approximately 1.8 million euros in support in 2020, while also paying a similar amount to the external shareholder entity.

The government has since pledged to examine the law on government subsidies and what qualifies companies to receive payments.

In his letter to Stanley, Nash asked Buck to investigate the problem under six different headings, such as how common paying dividends is among state-backed companies.

The government does not currently know how much taxpayers paid to companies that subsequently paid dividends to shareholders.

Terms and Conditions

Mr. Nash also asks the PAC to consider « what controls and conditions should be attached to such schemes in the future to prevent potential abuse of schemes and to better protect the interests of taxpayers and the public interest ».

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There are currently no mechanisms in place to prevent state-supported companies from paying their dividends.

Other state-backed companies that have paid dividends while supporting taxpayers include cake chain Krispy Kreme, which sent more than €1.6 million to the UK after securing Irish taxpayer support, and John Sisk & Co, Ireland’s largest builder, which paid Payments to the Sisk family.

“The intended purpose of these schemes is to keep workers in jobs at a difficult time for the Irish and global economy,” Nash wrote. « I think you’ll agree that the plans were not intended to inflate the bottom line of highly profitable companies. »

Mr. Nash said the government has acknowledged the problem. Taoiseach Micheál Martin, Finance Minister Paschal Donohoe and Tánaiste Leo Varadkar said companies that received state support and then paid a dividend should return taxpayers.