Government money aimed at helping companies weather the coronavirus is going to enterprises controlled by some of the world’s richest tycoons, according to data released Thursday by the Bank of England.
A number of firms owned by billionaires are tapping an emergency funding program backed by taxpayers, even as businesses great and small struggle to reopen. The initiative, called the Covid Corporate Financing Facility, is one of many the government and its central bank have unveiled to support companies that employ millions of workers and play a key role in the economy.
The companies include
Another recipient is the enterprise that oversees the stadium for premier league soccer team
The roster may increase scrutiny of companies that are availing themselves of state aid -- even though they appear to have owners with ample resources of their own.
“It is absolutely right that the Bank of England supports companies in order to save jobs and protect livelihoods, but I’m appalled that so many billionaire-owned businesses are being financed by the taxpayer,” said
Hodge, a former chair of the Public Accounts Committee, said her concerns run deeper than billionaire-controlled companies. She said the government must ensure firms that cut corners or use financial engineering to avoid big tax bills don’t take advantage of public support. In a June 3 letter, Hodge urged
Tottenham Hotspur said in a statement on its website that it will lose 200 million pounds from the lockdown, and will use the funding to meet working capital needs. As for Carnival, a spokeswoman said the company contributes more than 2 million pounds to the U.K. economy every time its ships dock in the country, which happens 250 times a year.
A spokeswoman for CNH Industrial pointed to a press release from April 29, in which the company said using the facility demonstrates its efforts to preserve a sound level of liquidity during the crisis. A spokesman for Chanel, which has 1,600 employees in the U.K., said the company closed all its boutiques in the country during the lockdown and will repay the loan within 12 months.
Under the CCFF, the BOE purchases commercial paper, with maturity of up to a year, issued by large firms making a “material contribution” to the U.K. economy. So far it’s provided companies with 16.2 billion pounds of funding. The CCFF is “directly protecting hundreds of thousands of jobs and supporting some of our biggest companies’ cashflows,” a Treasury spokesman said on June 5.
The effort operates in tandem with a suite of government-backed lending programs for smaller companies. While lawmakers and business groups have
(An earlier version of this story corrected Carnival’s contribution to the U.K. economy.)
(Adds Treasury statement and government data on business support in 12th and 13th paragraphs)
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