HomeLatest ThreadsGreatest ThreadsForums & GroupsMy SubscriptionsMy Posts
DU Home » Latest Threads » Forums & Groups » Topics » Economy & Education » Economy (Group) » Publicly traded firms pai...

Fri Sep 25, 2020, 10:38 AM

Publicly traded firms paid dividends, bought their own stock after receiving PPP loans to pay employ

Source: Washington Post

Publicly traded firms paid dividends, bought their own stock after receiving PPP loans to pay employees

Attorneys say the practice was not forbidden, but could raise questions about whether the PPP loan was needed

By Aaron Gregg
9/24/2020, 6:35:18 p.m.

Some publicly traded companies that received taxpayer-backed small business loans to pay their employees during the early weeks of the pandemic paid out millions to Wall Street investors in dividends and share buybacks, publicly available financial disclosures reviewed by The Washington Post show.

The findings reinforce long-standing concerns that the Paycheck Protection Program, an emergency stimulus fund offering low-interest, forgivable loans to businesses with fewer than 500 employees, was accessed by financially healthy companies that could have gone without a bailout.

Under the Small Business Administration rules, a PPP loan could be used only to meet payroll and pay mortgage interest, leases or utility bills. PPP loan recipients weren’t prohibited from paying investors with other funds, as long as the PPP funds were kept separate.

Still, some advocacy groups believe companies that had enough cash on hand to pay millions in dividends and stock purchases were unlikely to qualify for the PPP program, which was designed to assist troubled companies in keeping employees on the payroll during weeks when they were unable to do business because of pandemic-related lockdowns.

“The Trump administration wrote the PPP rules and sent billions of dollars to the well-resourced and well-connected rather than actual small businesses struggling during this public health and economic crisis,” said Kyle Herrig, president of an advocacy group called Accountable.US. “The fact that there was little transparency or accountability under this program amounted to an invitation for large companies to misuse tax dollars to their benefit.”

-snip-


Read more: https://www.washingtonpost.com/business/2020/09/24/dividends-buybacks-ppp-loans/

0 replies, 411 views

Reply to this thread

Back to top Alert abuse

Reply to this thread