Fidelity Fund Shareholders to Vote on `Genocide' Restrictions
2008-03-03 19:00 (New York)
By Sree Vidya Bhaktavatsalam
March 3 (Bloomberg) -- Fidelity Investments' fund shareholders will get their first chance to vote on a proposal that would block the mutual-fund manager from investing in companies that contribute to genocide.
The Boston-based company will hold a special shareholder meeting March 19 to vote on three proposals, including one establishing ``procedures to screen out investments in companies that, in the judgment of the board, substantially contribute to genocide, patterns of extraordinary and egregious violations of human rights or crimes against humanity,'' according to a Feb. 29 filing with the U.S. Securities and Exchange Commission.
Fidelity, the world's largest mutual-fund company, and other asset managers have been pressured by activists to sell stakes in companies such as PetroChina Co., the oil producer whose parent does business with the government of Sudan, where 200,000 people have been killed and 2.2 million made homeless in the civil war in the western Darfur region.
``There has never been a shareholder proposal explicitly calling out genocide,'' Eric Cohen, chairman of Boston-based Investors Against Genocide, said in an interview. The organization supports the proxy proposal. Fidelity's U.S. mutual funds slashed more than 91 percent of their PetroChina holdings last year. Its non-U.S. affiliate, Fidelity International, held PetroChina stakes valued at more than $400 million as of Dec. 31, Cohen said. Through U.S. mutual funds, Fidelity holds PetroChina shares valued at about $180 million, he said.
The SEC in January denied Fidelity's ``no-action'' request, which asked for permission to exclude the proposal from fund shareholders.
Fidelity Opposition
Fidelity, which oversees $1.6 trillion, recommended that investors vote against the proposal, saying in the filing that it would ``limit investments by the fund that would be lawful under the laws of the United States.''
The March 19 vote will be open to shareholders in funds including the $73 billion Contrafund, $9.3 billion Capital and Income Fund, the $32 billion Low-Priced Stock Fund and the $24 billion Puritan Fund.
Investors will also get a chance to vote on Fidelity's proposal to create two fund boards: one overseeing equity and high-yield funds, and one overseeing fixed-income, money-market and asset-allocation funds. Fidelity has recommended that shareholders approve the proposal.
--Editor: Larry Edelman, Greg Mott
To contact the reporter on this story: Sree Vidya Bhaktavatsalam in Boston at +1-617-210-4627 or sbhaktavatsa@bloomberg.net; To contact the editor responsible for this story: Larry Edelman at +1-617-210-4621 or ledelman3@bloomberg.net.
2008-03-03 19:00 (New York)
By Sree Vidya Bhaktavatsalam
March 3 (Bloomberg) -- Fidelity Investments' fund shareholders will get their first chance to vote on a proposal that would block the mutual-fund manager from investing in companies that contribute to genocide.
The Boston-based company will hold a special shareholder meeting March 19 to vote on three proposals, including one establishing ``procedures to screen out investments in companies that, in the judgment of the board, substantially contribute to genocide, patterns of extraordinary and egregious violations of human rights or crimes against humanity,'' according to a Feb. 29 filing with the U.S. Securities and Exchange Commission.
Fidelity, the world's largest mutual-fund company, and other asset managers have been pressured by activists to sell stakes in companies such as PetroChina Co., the oil producer whose parent does business with the government of Sudan, where 200,000 people have been killed and 2.2 million made homeless in the civil war in the western Darfur region.
``There has never been a shareholder proposal explicitly calling out genocide,'' Eric Cohen, chairman of Boston-based Investors Against Genocide, said in an interview. The organization supports the proxy proposal. Fidelity's U.S. mutual funds slashed more than 91 percent of their PetroChina holdings last year. Its non-U.S. affiliate, Fidelity International, held PetroChina stakes valued at more than $400 million as of Dec. 31, Cohen said. Through U.S. mutual funds, Fidelity holds PetroChina shares valued at about $180 million, he said.
The SEC in January denied Fidelity's ``no-action'' request, which asked for permission to exclude the proposal from fund shareholders.
Fidelity Opposition
Fidelity, which oversees $1.6 trillion, recommended that investors vote against the proposal, saying in the filing that it would ``limit investments by the fund that would be lawful under the laws of the United States.''
The March 19 vote will be open to shareholders in funds including the $73 billion Contrafund, $9.3 billion Capital and Income Fund, the $32 billion Low-Priced Stock Fund and the $24 billion Puritan Fund.
Investors will also get a chance to vote on Fidelity's proposal to create two fund boards: one overseeing equity and high-yield funds, and one overseeing fixed-income, money-market and asset-allocation funds. Fidelity has recommended that shareholders approve the proposal.
--Editor: Larry Edelman, Greg Mott
To contact the reporter on this story: Sree Vidya Bhaktavatsalam in Boston at +1-617-210-4627 or sbhaktavatsa@bloomberg.net; To contact the editor responsible for this story: Larry Edelman at +1-617-210-4621 or ledelman3@bloomberg.net.