HONG KONG • Hong Kong's property tycoons and global firms, including Ernst & Young and Jones Lang LaSalle (JLL), have received tens of millions of dollars in government-funded wage subsidies meant to protect jobs that would have otherwise been lost during the coronavirus pandemic.
While the companies are entitled to claim the subsidies, the payments to developers controlled by billionaire tycoons and financial firms employing highly paid professionals have raised concerns about the fairness of the programme.
White-collar jobs have largely stayed intact during the crisis, with the brunt of the city's recession falling heavily on low-skilled and lowly paid workers in the construction, retail and food industries.
To receive the subsidies, companies just had to promise not to reduce headcount below a pledged number, and use all the proceeds to pay salaries.
That stands in contrast to wage subsidy programmes in other countries like Australia, where firms had to show a steep drop in revenue to qualify.
In the United States, companies including burger chain Shake Shack returned funds after facing backlash for tapping a programme to support small businesses.
"This is very infuriating, the government turns a blind eye and doesn't introduce any unemployment benefits to many jobless workers who have trouble even surviving," said Hong Kong Confederation of Trade Unions chief executive Mung Siu Tat.
"But it continues to transfer benefits to big, powerful conglomerates with handsome profits," he said.
Among companies receiving subsidies in the first tranche of the HK$80 billion (S$14.1 billion) programme were chairman Victor Li's CK Asset Holdings, which got at least HK$22 million, and the billionaire Cheng family's New World Development, which received HK$56 million via its property arms to cover salaries between June and last month, according to government data compiled by Bloomberg.
CK Asset and New World were named by the Hong Kong Retail Management Association as two of the five most uncooperative landlords in providing rental concessions to struggling tenants in April.
Meanwhile, Henderson Land Development was paid HK$50 million through its property-related subsidiaries, and property agency JLL got HK$173 million.
CK Asset, Henderson Land and JLL did not respond to multiple calls and e-mail requesting comment.
New World said it had not applied for the programme, but its affiliated companies had done so based on their own operational needs and all subsidies were directed to employees, particularly front-line staff, construction workers and bus drivers.
Hong Kong's big property companies have suffered losses, their latest earnings show.
Wharf Real Estate Investment's retail rental income slumped by almost a third in the first half of the year, leading to a loss and a HK$7.4 billion hit to its portfolio. Revenue from Hong Kong property sales at CK Asset plunged by more than 60 per cent.
Even so, seven of Hong Kong's real estate tycoons sit atop a combined fortune of US$120 billion (S$164 billion), according to the Bloomberg Billionaires Index.
Hongkong Land Holdings, Central's biggest landlord, obtained HK$22 million through the programme.
The company decided to participate after "a thorough review", it said.
It pledged to maintain a headcount of at least 830 employees and launch a HK$100 million relief fund to help people most affected by the pandemic.
The government handouts are based on 50 per cent of actual wages, with a cap of HK$9,000 per employee each month.
The coronavirus pandemic, coming after months of social unrest, has exposed the cracks in Hong Kong's economy.
The city, one of the most expensive and unequal in the world, has little in the way of welfare.
The most direct financial assistance that Hong Kong workers have received during the pandemic was a one-time HK$10,000 cash handout given to all residents aged 18 and above.
Job losses have largely been concentrated in low-skilled labour as the virus shutdowns and travel restrictions smash the economy.
Unemployment in retail, accommodation and food services has more than doubled in the past year, climbing to 10.8 per cent in July. The construction industry has the highest proportion of workers - 11.3 per cent - out of a job.
Most of the developer subsidiaries that applied for subsidies do not specifically employ construction workers, except one entity owned by New World.
Other recipients of Hong Kong's subsidies include accounting giants Ernst & Young and KPMG, and large law firms Mayer Brown and Deacons, as well as Hong Kong-based Bank of East Asia.
Notably absent from the list of firms receiving subsidies were the major Wall Street and European banks.
"How companies behave in the pandemic will affect their brand value in years to come," said Mr Paul Smith, a former global president of the CFA Institute, the global association of investment professionals.
"Companies that appear greedy and accept government money when they don't need to will be damaged."
BLOOMBERG
