State hires three firms to manage Apple back taxes

Goldman Sachs, Amundi and BlackRock to manage €14bn funds while held in escrow

Both the Government and Apple are appealing the European Commission’s state aid ruling. Photograph: Getty

Both the Government and Apple are appealing the European Commission’s state aid ruling. Photograph: Getty

 

The Republic has selected investment firms Goldman Sachs, Amundi and BlackRock to manage €14 billion of back taxes and interest it has been ordered to collect from iPhone maker Apple.

The appointments mark the final step the State must take for Apple to start moving funds into an escrow account in the coming months, more than 15 months after an original deadline to collect the money was missed.

While the Government and Apple moved in late 2016 to appeal a decision months earlier by the European Commission that the iPhone maker owed the State billions of euro of allegedly illegal State aid, the Republic has agreed to gather the amount, plus interest, in the meantime and hold it in escrow. The case is currently before the European Union’s general court in Luxembourg, and is expected to ultimately end up in the European Court of Justice.

The Department of Finance said on Friday that French-based investment firm Amundi, which owns the largest asset management business in Ireland since it took over Pioneer Investments last year, US group BlackRock and Wall Street giant Goldman Sachs’s asset management arm would manage the funds while they are held in escrow.

Custodian

Earlier this month, the State selected BNY Mellon as preferred tenderer for custodian and escrow services in relation to the alleged Apple State aid recovery process. It will oversee the work of the three investment managers.

The Government missed an original deadline of January 2017 to collect the money from Apple, as the logistics of setting up the biggest and most complicated escrow account in the history of European state aid cases dragged on. Rather than transferring cash, Apple will mainly be moving bond investments, which will require careful management while held in the account.

Department of Finance officials have said the funds will start moving to the escrow account in the second quarter.

Market sources estimated last July that the custodians and investment managers responsible for the escrow account stand to make up to €15 million a year in fees for their services. The European appeals process may last up to four years.