U.S. Treasury chief warns larger firms could face probes over payroll money (updated)

Ruth's Hospitality

22/04/2020 16:07

(Adds details)
    WASHINGTON, April 22 (Reuters) - U.S. Treasury Secretary
Steven Mnuchin warned on Wednesday that larger companies could
face investigation if they apply for small business coronavirus
rescue money without carefully reviewing whether they qualify
for it.
    Mnuchin said on Fox Business Network it was "questionable"
whether some larger companies could make the certifications
necessary for the Paycheck Protection Program, and firms needed
to look carefully at the certifications they make to the
Treasury and the Small Business Administration to get forgivable
loans of up to $10 million.
    The U.S. House of Representatives is set to vote on a new
rescue bill that provides another $321 billion to the program
aimed at keeping employees at temporarily closed businesses on
the payroll after an initial $350 billion ran out in less than
two weeks.
    Some of the larger recipients included sandwich chain
Potbelly Corp  PBPB.O  and steakhouse chain Ruth Hospitality
Group  RUTH.O , prompting complaints that smaller, independent
restaurants and "mom and pop" businesses were squeezed out.
    Burger chain Shake Shack  SHAK.N  returned its $10 million
loan on Monday after it was able to raise $150 million in
capital in a stock offering.  urn:newsml:reuters.com:*:nL4N2C835D
    In the SBA application form, companies need to certify that
"current economic uncertainty makes this loan request necessary
to support the ongoing operations of the applicant."
    "I think a lot of these big companies, it's questionable
whether they can make that certification, I think they should
review it," Mnuchin told Fox Business Network.
    If companies apply and later decide that they cannot make
certifications that the money is necessary and "pay back the
money quickly, there will be no liability to Treasury and the
SBA," Mnuchin said. "If they don't, then they could be subject
to investigation."
    With the additional funding, which also includes $60 billion
for an emergency disaster loan program for small businesses,
Mnuchin said government aid would ultimately help some 60
million American workers, or close to half of U.S private sector
payrolls.  
    Mnuchin said he believed most, if not all, of the U.S.
economy should be reopened by later in the summer after a
devastating shutdown to try to stem the spread of the novel
coronavirus. 
    "We're looking forward to by the time we get to later in the
summer, having most of the economy if not all of the economy
open," Mnuchin said.

 (Reporting by David Lawder and Tim Ahmann
Editing by Bernadette Baum)
 ((tim.ahmann@thomsonreuters.com; +1 202 898-8370; Reuters
Messaging: tim.ahmann.reuters.com@reuters.net))