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Activists targeting investors in listed companies with interests in Sudan appear to have secured their first big victory with the sale by Fidelity Investments of most of its US holdings in PetroChina.
The activist coalition, formed to press the Khartoum government to act to end the genocide in Darfur, has been pushing Fidelity and other funds managers to divest from PetroChina because of its parent company’s oil business in Sudan.
Fidelity, the world’s largest mutual funds company, announced in a filing in the US that it had sold 91 per cent of its American Depositary Receipts in PetroChina in the first quarter of this year.
Fidelity did not say why it had sold the shares but the move is likely to embolden the coalition to increase pressure on other foreign investors to do the same.
Warren Buffett’s Berkshire Hathaway, the largest foreign portfolio investor in PetroChina, has rebuffed similar demands to sell its shares in the oil company.
Fidelity still holds significant numbers of shares in PetroChina’s Hong Kong-listed vehicle.
PetroChina has been a profitable investment for funds that secured stock early.
PetroChina listed at HK$1.27 in 2000 and on Wednesday closed up 0.1 per cent at HK$10.14 in Hong Kong.
PetroChina said on Wednesday the company “had not heard” of the Fidelity sale.
China National Petroleum Corp, PetroChina’s state-owned parent company and the country’s largest oil and gas enterprise, owns the largest single share in the consortium that dominates Sudan’s oil industry, in partnership with other foreign investors.
The Darfur coalition has targeted China because it believes Beijing’s financial support for Khartoum, combined with its position as a permanent member of the UN Security Council, have been pivotal in diluting international pressure over the Darfur issue.
In spite of the sometimes bellicose defence by Beijing and its state enterprises of the country’s soaring investments in Africa, Chinese interests are working hard behind the scenes to battle the negative perception in the West about their activities on the continent.
The big state oil companies, PetroChina, Sinopec and CNOOC, which all have interests in Africa, are working on “Corporate Social Responsibility” plans for the continent.
Separately, the use of divestiture as a political tool in the United States took a step forward on Wednesday when the Democratic heads of two House committees, Barney Frank and Tom Lantos, as well as Senator Barack Obama, introduced the Iran Sanctions Enabling Act to “empower” Americans to divest from foreign companies that invest in Iran’s energy sector.
“Pressuring companies to cut their financial ties with Iran is critical to ensuring that sanctions have their intended result,” Mr Obama said. The George W. Bush administration has stated its opposition to the bill.