Guest Post: Alliance’s Wage Subsidy Private Prosecution Commenced

A guest post by Simon Lusk:

Alliance Group’s failure to completely repay the wage subsidy is disgraceful. They have reinforced their disgrace by repaying half of the wage subsidy.

The wage subsidy was for companies that had an actual or projected fall in revenue of more than 30%. This was necessary to support those businesses that were forced to shut down or alter their business practices substantially during the Covid lockdown in the autumn.

Alliance Group appears not to fit this criteria. They were an essential service that continued to operate during the lockdown. They were outliers in an industry that did not take the wage subsidy. Others in the industry did not claim the wage subsidy because they were able to continue operating in a market where demand & prices did not drop by more than 30%.

Alliance paying back some of their subsidy is incomprehensible. They either have a fall in revenue of more than 30% in which case they are entitled to keep the entire amount, or they have not had a fall in revenue of more than 30% and they should pay back the entire amount.

Alliance is a strong, profitable company that should be doing its part in helping rebuild the economy. The retained wage subsidy is less than the profits they made last year. Instead they chose to take corporate welfare. They may be able to justify doing so, but they may not,and and it is important that an impartial referee adjudicates.

That is why I have sought leave of the court to bring a private prosecution against the Non Executive Directors of Alliance Group. I want an impartial adjudication of Alliances actions, on the public record and for all to see. Non Executive Directors are well remunerated for their governance role, but this role comes with consequences. This case aims to make the consequences personal, not something the directors can avoid by hiding behind the corporate structure.  

Alliance’s financial results will be made public in November if they following their normal practice. Then it will be absolutely clear whether they have had a 30% fall in revenue due to Covid, or if they have claimed a subsidy they do not deserve.

Even without the financial results, Alliance’s actions, market dynamics & their competitors not taking the wage subsidy provide plenty of evidence that they should have paid back the entire wage subsidy. While this is my opinion, there is an impartial process to prove whether my opinion is right, or Alliance is right. Let the courts adjudicate, and let the Non Executive Directors of Alliance front up in court and put on the public record their justification for retaining any part of the wage subsidy.