William Eichler 16 February 2022

Council embroiled in legal battle with Apple over pension losses

Council embroiled in legal battle with Apple over pension losses image
Image: Laura Hutton / Shutterstock.com.

Norfolk County Council has won the first round of a legal battle with Apple who the local authority claims ‘misrepresented’ the state of its business in China leading to loses by the council-run pension fund.

The county council has been involved in a legal fight with the tech giant for at least two years after the Norfolk Pension Fund lost a reported $1m (£740,000) due to its investment in Apple shares.

The local authority, which has brought the action on behalf of its pension fund, alleges that Apple ‘misrepresented’ its business in China during a conference call for analysts and investors in 2018.

According to a document from the US court, in response to an analyst who raised concerns about ‘deceleration’ in emerging markets such as India, Turkey, Russia and Brazil, Apple’s CEO Tim Cook said he ‘d[id]n’t see it as some sort of issue that is common’ among all emerging markets, as ‘each one of the emerging markets has a bit of a different story’. He then allegedly added: ‘I would not put China in that category.’

Norfolk County Council argues that while he was claiming that China’s economy was not at risk of deceleration, Mr Cook already knew that – to quote the court document – ‘the U.S.-China trade tensions and economic conditions in China were negatively impacting sales and demand for Apple products, particularly iPhones’. Mr Cook then allegedly instructed Apple’s smartphone assemblers to ‘halt plans for additional production lines’ for the recently released iPhone XR.

In January 2019, Mr Cook wrote to investors to inform them that revenue for the first quarter of 2019 was expected to be $84bn – contrary to Apple’s guidance range of $89bn to $93bn announced the previous November – due to ‘deceleration’ in China’s economy.

The letter said: ‘While we anticipated some challenges to key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China. In fact, most of our revenue shortfall to our guidance, and over 100% of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.

‘China’s economy began to slow in the second half of 2018. The government reported GDP growth during the September quarter was the second lowest in the last 25 years. We believe the economic environment in China has been further impacted by rising trade tensions with the United States.’

The court ruled that the local authority's case against the $3tn firm can be considered a ‘class action’, which means that Norfolk County Council can act as a representative of any other shareholder in the same position as them. This improves the council’s chances of winning the case.

A spokesperson for the local authority said that they could not comment on the case as it is still ongoing. However, they emphasised that the council is fully indemnified against costs arising in the case and that there is no exposure for taxpayers in Norfolk.

Apple denies wrongdoing and has argued that Mr Cook's comments were protected statements of opinion and not regulated financial guidance.

SIGN UP
For your free daily news bulletin
Highways jobs

Senior Social Worker

London Borough of Richmond upon Thames and London Borough of Wandsworth
£46,206 - £55,992
Senior Social Worker
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth

Waste Operations Support Officers

Durham County Council
£29,071 - £32,046
Temporary until 1 June 2029   Refuse and Recycling are looking for 3 Waste Operations Support Officer to work in the South and East of County Durham. Peterlee
Recuriter: Durham County Council

Recovery Worker

Durham County Council
Grade 7 - £31,015 – £34,811 per annum.
Do you want to make a real difference to the lives of people experiencing hoarding and self-neglect behaviours?   As an Agile Recovery Worker within o Durham
Recuriter: Durham County Council

Finance Officer

Durham County Council
Grade 7, £30,024 - £33,699 per annum. Pay award pending.
We are seeking a Finance Officer to join DurhamLearn, where you will play a key role in supporting the financial administration, budget monitoring and Durham
Recuriter: Durham County Council

Social Work Consultant

Durham County Council
Grade 13 - £47,181 - £51,356 (Pay Award Pending)
Do you believe every child deserves to grow up feeling loved, safe, and supported, with a lasting sense of family, belonging, and stability?   Are you Durham
Recuriter: Durham County Council
Linkedin Banner