Monday 26 August 2019

Romney invested in junk bonds firm here

Thomas Molloy

MITT Romney, the Republican presidential candidate challenging Barack Obama for the White House, has invested in a Dublin-based company that buys junk bonds, his personal tax returns show.

Mr Romney, one of the wealthiest people ever to run for the presidency, has invested in a company called Alpstar CLO 2. It has an address at Harbourmaster Place in the IFSC and had assets last year worth €463m.

Alpstar CLO 2, which has connections with a Swiss company of the same name, buys distressed bonds in companies, mainly in the healthcare, food, leisure, telecommunications and construction industry.

IFSC

Although the company is based in Dublin, it had only 0.4pc of its capital invested in Ireland in 2011 (down from 1pc in 2010). About half of the investments are in the UK, the Netherlands and Germany.

Alpstar is typical of hundreds of funds based in the IFSC which cater to the investment needs of wealthy individuals but fly below the radar.

The company's lawyers are Arthur Cox and the auditors are Deloitte and Touche.

The company has two directors, Raheny-based Eimir McGrath and David McGuinness. Both hold just one share in the company.

Ms McGrath (42) is or was a director of 271 other companies -- all with names like Signum Finance. Her fellow director, Mr McGuinness (42), is a director of 272 other companies based in Dublin, Jersey and elsewhere.

The shelf company's main shareholder is Deutsche International Corporate Services.

Mr Romney made the investment through Goldman Sachs, according to his tax returns. He does not appear to have made any profit from his investment last year.

The candidate has come under fire politically for his wealth and his investments in the Cayman Islands, Switzerland and Ireland.

In an interview on Sunday, Mr Romney said he thought it was "fair" that he paid a lower tax rate on his investment income of $20m (€15m) last year than someone who made $50,000 annually.

He was asked about the 14pc tax rate that he paid on the $20m he made on his investments in 2011.

"It is a low rate," he said. "And one of the reasons why the capital gains tax rate is lower is because capital has already been taxed once at the corporate level, as high as 35pc."

Mr Romney released his 2011 return last Friday, which showed that he paid an effective tax rate of 14.1pc.

He pays a lower tax rate because his earnings come from investment income. Earnings from wages can be taxed at a rate of up to 35pc in the US.

Mr Romney has steadfastly refused to release more than two years of his tax returns, breaking what has been a long-standing presidential campaign tradition.

(Additional reporting, Reuters)

Irish Independent

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