Liquor barons claim $550k
Two liquor store barons with multimillion-dollar property portfolios and a record of treating staff poorly have received more than $550,000 from the Government’s coronavirus wage subsidy scheme.
A tax commentator has questioned the morality of wealthy business owners seeking taxpayer handouts.
The wage subsidy is available to all businesses that can show a minimum 30 per cent drop in actual or predicted revenue in any month from January to June that is attributable to Covid-19.
Employers are not required to satisfy a good character test or sell assets before applying.
However, Work and Income’s website does advise businesses to mitigate the financial impact, which can include ‘‘drawing from your cash reserves (as appropriate)’’.
In recent weeks, Stuff has been contacted by people concerned about the money Nekita Enterprises, Karmen Enterprises and Big Daddys, companies that have a significant stake in the Canterbury liquor industry, have accessed.
Nekita Enterprises Ltd, which is controlled by Harjit and Sheen Singh and owns more than a dozen bottle stores across Canterbury, has received $302,000 to subsidise the wages of 47 staff, according to the Ministry of Social Development’s (MSD) website.
Super Liquor Holdings terminated its contracts with Nekita Enterprises in February after the Labour Inspectorate found the company had paid several staff less than the minimum wage and kept inaccurate records. Nekita Enterprises stores now trade under the name Canterbury Liquor.
The Press previously revealed the Singhs, who have an extensive property portfolio worth more than $6 million, designed a palatial multimillion-dollar mansion while
the company was being investigated by the Labour Inspectorate.
In March, Harjit Singh set up two new companies, Canterbury Liquor Baron and Liquor Tycoon, names which appear to be in response to recent headlines about Nekita Enterprises.
Meanwhile, Karman Enterprises and Big Daddys, which are controlled by Hardeep Singh and own 10 liquor stores in Canterbury, have received $265,000 to subsidise the wages of 39 staff.
Super Liquor Holdings ‘‘mutually
agreed’’ to part ways with the two companies on April 9, after The Press revealed a restaurant business linked to Singh and his wife Gauravjot Kaur hadn’t properly paid staff.
The couple are part way through building a mansion on the outskirts of Christchurch and also have an extensive property portfolio.
Earlier this month, the Ministry of Business Innovation and Employment (MBIE) fielded an anonymous ‘‘wage subsidy complaint’’ about Big Daddys and
Karman Enterprises.
It also received an ‘‘email of concern’’ related to the wage subsidy about Nekita Enterprises.
Both would be passed to MSD, which administers the scheme, ‘‘for review’’, an MBIE spokeswoman said on Thursday.
An MSD spokesman said ‘‘it isn’t our practice to comment on individual cases, for reasons due to privacy’’.
Harjit and Hardeep Singh, who are not related but socialise together, both declined to comment.
Michael Gousmett, an independent researcher and adjunct fellow at the University of Canterbury, said in his view it was ‘‘straight exploitation’’ that the companies connected to the Singhs had accessed money through the scheme.
‘‘There’s a moral imperative here surely that they [the Singhs] should not be able to claim this,’’ he said.
‘‘In this case, in my opinion, they [the Singhs] have taken advantage of a situation that’s been delivered to them on a silver platter really and they should be required to pay it back.
‘‘When they talk about the wage subsidy I wasn’t thinking about organisations like [liquor] barons and the like, I was thinking of a lot of new businesses setting up postearthquake . . . [that] will be doing it really hard at this time.
‘‘I imagine that’s the kind of business that the Government is trying to support, not multimillion-dollar enterprises with wealthy owners who can afford to build . . . mansions.’’
Gousmett believed the rules around claiming the subsidy were loose and the Government had been ‘‘too trusting’’.
Last week Finance Minister Grant Robertson warned businesses the Government had a duty to make sure taxpayers’ money was ‘‘going to where it is intended to support the economy’’.
‘‘Everyone who has taken money from the wage subsidy scheme needs to know that our audit teams will be looking across the full sweep of applications,’’ Robertson said.
If anyone believed that ‘‘perhaps their circumstances are not what they thought they were when they applied’’, they should get in touch with MSD, he said.
As of last Friday, a total of
$17.5 million of wage subsidies was being repaid by more than 1200 companies.
$16.2m of the repayments were volunteered by companies and the self-employed that claimed the subsidies in error.
But random and targeted audits into 2435 wage subsidy claims and
292 allegations of abuse of the scheme had led to 56 applicants being asked to repay $1.25m.
The wage subsidy is designed to subsidise the employment of fulltime workers to the tune of $585.80 a week until the end of June, and part-time workers by $350 a week.
To qualify, employers must keep paying staff at least 80 per cent of their normal income where reasonably possible.
‘‘In this case, in my opinion, they [the Singhs] have taken advantage of a situation that’s been delivered to them on a silver platter really and they should be required to pay it back.’’
Michael Gousmett
Independent researcher and adjunct fellow at the University of Canterbury